Once again, it is the time to wish you well and to remember the big news stories of the year. So without further ado…
Meanwhile, another Indian vendor, Connectiva, went bust, though this was not clear at the time because its bosses kept pretending they were still in business. Unpaid and disgruntled Connectiva employees demonstrated the power of the internet to subvert official communication channels (or the lack of communication) by launching their own anonymous blog.
Israeli vendor cVidya went looking for money and possible buyers, but found neither. However, they accidentally revealed that their various claims about revenues and growth simply did not add up. Whilst cVidya’s numbers had been inflated, Lebara Mobile boasted how they had ‘ended revenue leakage’.
The month also delivered some more serious and reliable intellectual property, for those who are interested in that kind of thing. Portuguese vendor WeDo obtained a patent for data gathering technology whilst TRI released their report on business assurance.
Subex, the leading Indian vendor of business assurance, announced a string of new sales whilst continuing to negotiate a restructuring of their FCCB debts; see here. And then, for good measure, they announced yet another multi-million dollar contract. WeDo were upbeat after announcing stable results for the 2011 financial year, but they talked darkly about a challenging market and hinted that intense price competition might drive some of their rivals under; see here. And TEOCO, the Virginia-headquartered vendor that specializes in cost management and analytics, showed where they thought the market was heading. They purchased Schema, a company that specializes in RAN optimization, for an undisclosed price.
In contrast, regulators continued to do what they are best at: nothing. Ofcom, the UK regulator, published an action plan to deal with bill shock. The plan was fine apart from the lack of action.
The sector demonstrated there are diverging attitudes to managing its intellectual property. FICO patented ‘revenue assurance analytics’, adding to a stockpile of related patents they had built up under their old brand of Fair Isaac. Meanwhile, Lionel Griache spoke to talkRA about the decision to open up the source code for his ProactiveRA tool.
Although Connectiva’s bosses continued to pretend they were a going concern, their problems became even more obvious when they sold off their parser code.
WeDo acquired Connectiv Solutions, US providers of cost management and network efficiency tools, with the intention of cross-selling Connectiv’s offerings and getting better traction in the massive US market. At the other end of the scale, Xintec raised EUR900k from seed funding and government schemes. The small Irish company offers RA and FMS solutions targeted at the smaller telcos who have not been well served by the larger vendors. And at the very bottom of the scale, Connectiva (note the ‘a’ on the end of the name) was negotiating a deal to be sold to Mara-Ison, the Dubai-headquartered IT services firm, whilst their bosses were still telling customers that all was fine. The sale was eventually confirmed in a very discreet way, as if Mara-Ison was embarrassed by the deal.
Lovers of big government cheered when Ghana’s regulator announced a CDR audit of the country’s six operators. The audit would determine if the government was receiving all the tax it was entitled to. On the other hand, haters of big government cheered when Nicholas Merrill, tired of government gagging orders and invasions of privacy, proposed to launch an ISP where privacy and cryptography would be so thoroughly built-in that literally nobody would be able to snoop on his customers or found out their details – not even him. For more about Merrill and his Calyx Institute, see here.
As part of the deal to restructure Subex’s FCCBs, Subash Menon, founder of Subex, and Sudeesh Yezhuvath, Subex COO, agreed to forgo their ‘golden goodbye’ payments in the event of leaving the company. Menon also stood down as Chairman, whilst retaining his position as CEO. The results announced for the previous financial year were broadly stable; for more, see here. Meanwhile, WeDo’s purchase of Connectiv appeared to have delivered them a rapid return, after they announced a deal to supply revenue assurance services to ‘one of the largest carriers in the United States’.
Two coincidental reports showed that whistle-blowing is a crucial and cost-effective mechanism to detect and prevent fraud. To find out more about the reports by the The Ethics Resource Center of the USA and the Association of Certified Fraud Examiners, you can look here. Meanwhile, the US comms regulator, the FCC, looked for evidence of fraud and waste in a program to supply free phones to the poor, and concluded that they could save USD200M by implementing simple controls to tackle abuse.
More good news for WeDo came in the form of successful diversification into the retail sector; they announced new retail sector customers in Russia and the USA. On the other hand, KPMG’s attempts to secure some news coverage backfired because of gratuitous exaggeration. One of their goons said that African utilities are losing 40% to 45% of revenues on average due to improper billing. He failed to mention which of these firms had their accounts audited by KPMG.
Subex announced ‘tough’ results for their Q1, with revenues well down. However, CEO Subash Menon vaguely promised that this was due to the way that revenues were being recognized, and that the numbers would bounce back in later quarters.
Shahid Ishtiaq of Etisalat revealed his second ground-breaking idea for improving the efficiency of revenue assurance. Shahid blogged for talkRA about the in-house development of the CRAWLER tool for cheaply combining assurance data from multiple sources so it can be easily interrogated by an analyst. The idea has since caught the attention of London-based vendor Cartesian, who graciously acknowledged that Shahid inspired their ideas about ‘horizontal assurance’. If you were unaware of Shahid’s first ground-breaking idea, then feel free to ask cVidya’s CTO where he gets his product ideas from. The
self long-serving head of the TM Forum RA group received yet another award from the TM Forum for his long-servitude, but failed to name any individuals that he steals uncredited ideas from voluntarily contribute their telco’s IP to the TM Forum.
August was a good month for gadget-loving readers of talkRA, and also for the publishers of our book. Revenue Assurance: Expert Opinions for Communications Providers was made available as a Kindle e-book, and it promptly leapt up the Amazon rankings. If you forgot to buy a present for that beloved revenue assurance analyst who brightens up your life, now you can download the book, instead of waiting for the postman.
Subash Menon stepped down as CEO of Subex, only retaining the role of a non-independent director. Industry peers expressed sympathy and admiration for Menon, noting how he had remained charming and personable, even whilst being a tough competitor who built a global market leader from the ground up. Things might have been very different if Subex had walked away from the opportunity to buy Syndesis, a firm that cost far more than the meagre returns that Subex was able to squeeze out from it. Worse still, the FCCBs used to finance the purchase were turned into a noose around Subex’s neck by forex and stock market movements. Menon slipped the noose thanks to a second renegotiation of the FCCB terms, but a downturn in results for Q1 and subsequent quarters finally prompted the departure of the man who gave his name to Subex. Surjeet Singh, former Patni CFO, was rumoured to be Subex’s in-coming boss, and those rumours were subsequently proven true.
The bond between fraud management and security became stronger and stronger over the year, and this was emphasized by the release of the 2012 Lookout Mobile Security Report. The report identified the disturbing prevalence of mobile malware designed to secretly contact premium SMS numbers. Concerns focused on Russia and Eastern Europe, with Lookout finding that 41.6% of Russian devices are infected with malware or spyware. Separate stories reinforced the point, including BBC coverage of disgruntled Russian telco customers, and a large fine for a Russian-owned firm selling dodgy Android software in the UK. Look here for more.
October was silly number season, proving that it is sometimes impossible to exaggerate how bad things really are. It brought vindication for believers in bill shock, consumer advocates who condemn telcos for sloppy errors and giving poor customer service, and those of us who know regulators never get anything done. That vindication came in the form of a bill for 11,721,000,000,000,000 Euros received by an unemployed child minder in France.
However, this was not the most ridiculous number that the telecoms industry generated in October. The buffoons at Global Telecom Business decided to associate Alon Aginsky, cVidya CEO, with the number 95, when they claimed Aginsky is the 95th most powerful person in telecoms. Several thousand telecoms executives would have complained, if they were not busy running much bigger and more profitable companies than Aginsky does.
Not wanting to be overlooked during silly number season, Subex’s new management team made some extraordinary boasts for how much their tools boost productivity. The numbers were extraordinary because they were both large, and incorrectly calculated.
Silly number season was ended with a jolt by the publication of Subex’s Q2 results. Contrary to promises made after the Q1 release, revenues were further down and a large provision was taken for bad debt. The notes also revealed that Subex was disputing a bill for unpaid taxes dating back to 2006.
In a surprise move, a UK government official gave some good and honest advice that people should hear, even though others want to suppress it. Andy Smith, who is a security manager for the UK Cabinet Office, told a conference that it is sensible for internet users to provide false names in order to protect themselves from abuses of their identity. Soon after, UK mobile operator O2 suffered yet another outage, infuriating one anonymous individual who emailed me copy for an excellent guest post explaining why operators must invest more in business continuity. I was happy to oblige.
There was no news in December. Seriously. No news at all. Apart from the lack of news. If you want a list of no-news-so-far stories that I forecast will be news stories in future, then here they are:
- More telcos will merge or co-locate their tech security and fraud management teams in order to deal with the overlapping issues raised by ever more sophisticated cybercrime and malware.
- Huawei has not yet squeezed into the RA and FMS consulting/SI market, but it is only a matter of time before they offer a carbon copy of somebody else’s methodology whilst trying to gain share by driving prices even lower. Huawei will soon do a lot more in this space, if only to protect management face in case ZTE gets any unexpected traction with pushing their RA and FMS lines. However, Huawei will have problems making progress chiefly because they will want to reward their staff less than they could have earned by working for some of the best-paying telcos. As such, they will not be able to fully lever their existing global customer base, and their new assurance offerings will primarily be sold within China.
- Simpler tariffs and the migration of some traditional forms of traffic to internet-enabled substitutes will lower the need for retail-facing telecoms assurance. There will be an uptick in demand for inter-business assurance as content supply and payment chains get more complicated, but this will go unreported because these forms of assurance will be bespoke for each situation and so will defy categorization or automation.
- Concerns about short-term costs and cashflows mean that Subex will not adopt a long-term R&D strategy to rejuvenate their business. They will struggle to find ways to differentiate themselves from competitors like cVidya, meaning they will not improve results in either the short term or long term, and will continue to be caught in the trap of fierce price competition. However, they will maintain a core of profitable long-term relationships with their key customers.
- Big data technology will erode the business case for more specialized and niche deployments of technology in order to scrutinize large volumes of data; for example, revenue assurance systems. However, the erosion is gradual and will go largely unreported.
- WeDo will be the first major vendor of telecoms business assurance that will generate more than half of its revenues by selling assurance products and services to companies outside of the communications sector.
- The changing cost dynamics of technology mean Xintec and other small players will start to compete for projects that previously would have only been pitched to the larger vendors. This, in turn, will encourage the very smallest CSPs to start thinking about open source software for core assurance tasks.
- Even bigger economic trends will start to rebalance the cost advantages of employing staff from developing countries. As Western European telcos continue to slim down their workforce, older practitioners with very significant experience will come on to the market, and they will start to form alliances to counter the divide-and-conquer mentality that will otherwise accelerate price competition for skilled manpower. Some of these alliances may congregate around strong niche brands where the competitive pitch will be based on providing the highest calibre of staff rather than the lowest price.
- Company boards will lack the requisite skills to oversee the handling of increasingly significant cybersecurity risks so they will come under increasing, but vague, political pressure following every new scandal. However, there will not be any meaningful change in the expectations set for corporate boards because legislators and regulators also lack the skills to determine what should be done. Over time, government understanding will rise as a by-product of greatly increased government investment in cybersecurity. Some governments will allow public resources to be helpfully deployed to also assist business, some will try to dictate terms to business under the cover of ‘cooperation’ in the hopes of keeping down the cost to the public purse, and some governments will start instructing private businesses to do things that are neither in the interests of their shareholders or the public at large. The securest nations will be the ones which spend most public money on cyber defence.
- The disruptive influence of the internet will accelerate until it becomes the new status quo for business networking and disseminating information. Business models that rely on attending conferences, advertising in printed journals and other traditional forms of marketing and salesmanship will become secondary to new ways of doing business. Organizations and marketing teams that are rooted in the old forms, like the TM Forum, will deploy a lot of resources to resist or hijack the transition, but this will only be a stay of execution unless they eventually emulate other entities that have dropped the physical side of their business in favour of doing everything through a digital and virtual medium. The transformation will lead to certain kinds of jobs being lost without there being an equal compensating rise of new vacancies.
- Nobody has bought cVidya yet, and nobody will. It is more likely that when the money runs out, we will see a re-run of how cVidya was combined with ECtel, with a merger being brokered between them and another middling Israeli tech firm.
Phew. What a year that was. In 2012, talkRA covered more news than any year previously, and that was despite the fact that much of the news – like Connectiva’s collapse – could not be found in press releases. It comes as no surprise that so much news helped to lift talkRA’s visitor numbers to the highest they have ever been. 2012 was the year I saw talkRA take on a new significance it has never had before. As more and more information goes on-line, and as we all become accustomed to hearing the full uncensored story of events, it became plain that we were not going to hear a single peep about major stories like Connectiva’s demise except through channels like talkRA. It is not good enough for somebody to equate journalism or knowledge sharing with taking a stapler and binding together a series of adverts pushed by companies wanting to sell something. Sometimes the greatest news story occurs where nobody is selling anything, but we still need to know about it, and that will be increasingly true as cybercrime casts an ever darker shadow over our domain. Though 2012 was unprecedented, I expect 2013 is going to be an even more dramatic year for our field. And because of the nature of the unfolding events, I predict there will be only one place to read the full story – and that place is right here.