Tuesday, 06 December 2016

Telcos need new skills in NFV world – Vimpelcom

By Mary Lennighan, Total Telecom
Friday 26 February 16

Telco contracts ZTE for vEPC, aims to work in new way with vendor partners.

The days of traditional vendor-operator relationships between the telcos and the companies that supply their equipment are numbered, Vimpelcom said this week, as it detailed its plans to overhaul its business and embrace a digital future. To date, telcos have effectively behaved as project managers, contracting a vendor to provide a box and install it in their network. "Now, that has completely shifted…

The days of traditional vendor-operator relationships between the telcos and the companies that supply their equipment are numbered, Vimpelcom said this week, as it detailed its plans to overhaul its business and embrace a digital future.

To date, telcos have effectively behaved as project managers, contracting a vendor to provide a box and install it in their network. "Now, that has completely shifted," Yogesh Malik, Vimpelcom's chief technology officer, told Total Telecom at Mobile World Congress earlier this week.

As they increasingly adopt virtualised network strategies, operators now need coders and data scientists, which are very different skillsets to vendor management, he said.

Vimpelcom is embracing that new world, and on Tuesday made its first NFV announcement as part of its new network reinvention programme. It has contracted China's ZTE to provide a virtual Evolved Packet Core (vEPC) network across five markets.

"It works, and it works perfectly," Malik said.

The network is running in Kyrgystan and Laos, he said. "That's the first step." Other markets, including Uzbekistan, will follow later this year.

Next-generation networks will be very different to what has gone before, Malik said. "Networks will not need to be full stacks in every country," he said.

Vimpelcom also aims to work with its vendor partners, the companies that previously would have supplied it with boxes, in a new way.

"Between us and our partners there's a lot of duplication," said Malik. The relationships were built on penalties for failing to meet targets and stringent SLAs, he said "We wanted to change that."

The telco insists that the vendors – he listed Ericsson, Huawei and Nokia, in addition to ZTE - are now becoming its network operations partners, with relationships built on gain-sharing rather than risk-sharing.

The new approach sees Vimpelcom take an aspect of its network or business and give it to a vendor partner, with both companies opening up their cost structures and having trust in one another. That way, it is possible to "reduce both costs dramatically," he said.

For a telco, the differentiator is no longer the network, but the customer experience. "Network-sharing is imperative," Malik said.

"We want to be absolutely asset-light," he said. "The real asset is data. The real asset is our customer."

As it stands, a telco's success is measured via the dividends it pays to shareholders, unlike an over-the-top Internet company, whose returns are calculated based on metrics like monthly active users, Malik pointed out.

"Our TRS should be based on...paying the bill," that is, the number of customers spending money on a monthly basis, he said.

That kind of approach needs backing from the top, and Vimpelcom insists it has it.

The company's chairman, its shareholders, and CEO Jean-Yves Charlier are all "fully committed," Malik said.

Other industries have adapted to become much closer to their customers, he said, using the Coca-Cola campaign to print names on drinks cans as a recent example.

"Industries are personalising. Why are we not?" he asked.

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