Telecommunications Q&A with Elie Simon, Vice President, Sun Microsystems EMEA

Q & A

Telco Trends In Europe With Sun VP Elie Simon

The last few years have seen a real convergence of IT and telco. Services based on Internet Protocol (IP) technologies play directly to Sun's strengths as a network company.

Wednesday, May 05, 4:00 PM PT

Q: What are the major trends in telecommunications in Europe, Middle East, and Africa (EMEA)?

A: Like most businesses, cost reduction is a big factor for telcos at the moment. They are looking for ways to consolidate their infrastructures to save money and free up resources in order to develop new services and drive more revenue.

With voice revenue declining, it is imperative that operators gain more revenue from existing customers and reduce churn. Coupled with the 3G license investment across EMEA, it is critical for operators to make these services compelling and popular. The big news from 3GSM World Congress 2004, held in Cannes, France, was that 3G arrived and a greater proportion of users are now using the mobile networks to access data services.

The constant battle for any operator is to increase ARPU (average revenue per user) and AMPU (average margin per user) while decreasing churn rate. Operators across EMEA are attempting to do this in the wireless market with new services--both data and messaging services--that provide customers with access to entertainment, information, and communication channels. At the same time, the operators are looking to make it easy for customers to discover and use these services.

Fixed-line telcos are examining ways of utilizing their networks to provide as many services as they can to counteract this. The fixed-line market is competing against the decreasing price and increasing reliability of mobile calls, leading to more and more customers choosing to have one number and one phone. They are also fighting against the threat from the cable companies offering a triple play of television, telephone, and broadband services.

These fixed-line operators are fighting back with attractive bundles of broadband access, cheaper voice calls, and in some cases, mobile telephony contracts.

Q: What are the business challenges facing telcos in EMEA?

A: The top three issues for telcos in EMEA are similar to the issues affecting all businesses. First, companies are looking at ways to take cost and complexity out of their business. Next, telcos across the region are looking to deliver new services (voice, date, picture, video, and many more) quickly and efficiently. Last but not least, EMEA telcos are wholly focused on returning to, and maintaining, ongoing profitability.

A more specific issue that EMEA telcos face, primarily in the mobile space, is the need to provide services that rise above the "me too" offerings and start to offer real, tangible business benefits to the enterprise user. Offerings such as "one-to-many" or "machine-to-machine" messaging services, mobile Web services, and enterprise-class applications will drive revenue and usage forward over the next few years.

Finally, the issue of identity and identity management will become increasingly important for operators, content owners, and customers as applications, services, and digital content become more and more targeted and specific to individual customers.

Q: Why should customers look to Sun to address these issues?

A: The last few years have seen a real convergence of IT and telco. More and more telco services are based on Internet Protocol (IP) technologies, and this plays directly to Sun's strengths as a network company. Sun has more than 22 years of experience in creating the infrastructure, the technology, and the service capabilities to deliver real IP services to the telco market. Working with our iForce partners, system integrators, and network equipment provider (NEP) partners, we can deliver a rock-solid, IP-based infrastructure to solve the most complex network challenges.

At the heart of Sun's business--and at the heart of the innovative services being delivered to telcos across the EMEA region--is Java technology. Java is present in more than 1.5 billion devices across the globe. In the mobile world, there will be 250 million Java technology-enabled phones globally by the end of 2004. Sun is working with operators and handset manufacturers to make sure that Java technology-based applications are tested and certified, ensuring a quality user experience.

Sun is also working hard to drive down cost and complexity within the telco infrastructure. Through our skills in server consolidation and our low-cost computing strategies, we are enabling telcos to manage their data centers; driving out cost and complexity; and allowing more time and money to be spent on creating new services and attracting new customers instead of fighting fires and maintaining their data centers.

Q: What else should telecommunications companies know about Sun?

A: They may not know that Java plays a vital role at the heart of their technology infrastructure, and that Sun is active at every level of the Java community and development. Java is more than simply a compelling platform for mobile games deployment. It is more than simply a platform that allows for applications to benefit from the "Write once, run anywhere" functionality. Through initiatives such as JAIN (Java APIs for Intelligent Networks) and the OSS/J Initiative, Java technology is creating a fundamental shift in the way mobile operators and fixed-line telcos can provide services and solutions to their users and subscribers.

Sun is also a driving force in network identity. As a founding member of the Liberty Alliance Project, we are helping operators act as identity providers to external companies without compromising security for the user or the operator. Sun is the first technology vendor to ship products based on the standards set by the Liberty Alliance.

Q: How is Sun helping reduce cost and complexity for telcos in EMEA?

A: Sun is doing this in two fundamental ways. First, we have systematically reduced the cost of our hardware. From one- and two-way SPARC and x86 servers, to high-end SPARC/Solaris and NEBS-certified technology, we have reviewed our product portfolio to ensure that customers receive the best possible technology at the best possible price.

Our software portfolio has been simplified enormously. Sun has also simplified its software portfolio and the way it sells software. The Java Enterprise System provides a complete portfolio of software products, all for a simple, per employee licensing cost.

Sun is also changing the way we sell to our customers. Through solutions and reference architectures, we are offering our customers the tools to solve complex networking issues with tried-and-tested solutions based on Sun and third-party technology. We believe that customers want solutions, they want business and technical issues solved, and they want technology vendors to help them do this. The days when it was acceptable to ship numerous boxes and cables and expect the customers to work it out themselves are long gone. Sun's Reference Architecture and solution-based approach targets the main customer issue: reduce cost and complexity in the data center.

Q: How is Sun helping accelerate service deployment for telco in EMEA?

A: At 3GSM Cannes, Sun launched its Java Verified Program. It's going to save developers and telcos money.

At last year's Java One 2003, Sun, Motorola, Nokia, Siemens, and Sony Ericsson announced the Unified Testing Initiative, a program whereby these companies agreed to align their mobile content testing efforts to develop one set of common criteria. At Cannes in February 2004, these companies consolidated their individual testing programs into a single program: the Java Verified Program.

Through this program developers, operators, and handset manufacturers can save time and money by eliminating the need for redundant, independent certification. Java's promise of writing once, running anywhere is now as real in the mobile space as it is on desktop and enterprise systems. The Java Verified Program cuts cost, saves time, and makes it easier and quicker to see real ROI on mobile applications.

Q: How is Sun helping unleash mobility with security for telco in EMEA?

A: Network identity is absolutely crucial for a telco. Managing user identity with security is vital to ensure that customers gain access to the right services at the right cost in the right manner. The way the mobile market is evolving means that the telco operators will not provide 100 percent of the content or services to users; they will look to third-party content and application providers to enhance the user experience. What operators will demand is that they know exactly who is using their networks and what services and applications they're accessing. Network identity allows that.

Security is built into everything that Sun does and has been since our earliest days. We don't view security measures as add-ons or optional extras; we bake them into our products at the development stage. Java technology is an excellent example of this. Because the Java platform was developed with security as a fundamental principle, it cannot be used to carry or spread viruses to the operating system or a phone.

Enterprise mobility is real now. We are helping customers provide secure real-time and offline access to their corporate information through any device. With almost 250 million Java technology-enabled phones in the marketplace today, enterprise applications can be written in Java and deployed on existing handsets. No need to provide a workforce with new devices--they can use the phone they have.

Q: Do you have any final thoughts for the telco industry?

A: Sun can help you reduce your costs, increase your revenue and margins per user, and decrease user churn rate. In addition, Sun can help operators, developers, and handset manufacturers deploy innovative, cutting-edge solutions and services that provide real value and an enhanced user experience to customers.

As vice president of Sun Microsystems' Europe, Middle East, and Africa (EMEA) region, Elie Simon is responsible for the management and strategic focus of the business across the region.