How to Retain Customers and Boost Revenue

Spain's top communications service provider, Telefonica Moviles, offers mobile content and services from more than 200 content providers. In early 2000, Telefonica Moviles kicked off a project to deploy mobile services based on Java technology. The goal of the initiative was to create a network of content providers while laying the foundation for ongoing enhancements to subscriber services.

A communications service provider's work is never done. At least, not if it wants to maintain a leadership position.

Above and beyond offering basic voice service to more than 41 million wireless customers in 10 countries, Telefónica Móviles is committed to staying one step ahead of subscribers' expectations. Spain's top communications service provider (CSP), Telefónica Móviles offers mobile content and services that span the spectrum from weather, travel, news, and sports information to banking services to purchasing tickets and playing games. The content and applications come from more than 200 content providers.

As it expands its service offerings, the company has found that it retains customers longer and fuels demand for a greater variety of mobile content, which subscribers are more than willing to pay for. In the first nine months of 2002, for example, it added 3.6 million new customers.

In early 2000, Telefónica Móviles kicked off a project to deploy mobile services based on Java technology. The goal of the initiative was to create a network of content providers while laying the foundation for ongoing enhancements to subscriber services.

Previously, Telefónica Móviles had bundled content offerings into its standard wireless plans for a flat rate. But working with its long-term technology vendor Sun Microsystems, Telefónica Móviles executives realized they could offer the new wireless services on a pay-as-you-go basis, significantly increasing potential for boosting average revenue per user, according to a recent Patricia Seybold Group case study.

The Challenge

Telefónica Móviles wanted to set up real-time provisioning of services to individual and business subscribers, allowing them to access applications and information about the stock market, weather, and sports, as well as play games and browse the Internet wirelessly. The company also wanted to make it as easy as possible for content providers to integrate their offerings into its delivery system. And because the company conducts business in 17 countries, the content had to be customized for multiple countries and multiple languages.

In addition, the content provisioning system had to work with the company's existing infrastructure--which provides location-based services, delegated billing, identification and authentication, and messaging--without requiring specialized software for customers' existing wireless handsets. As such, the solution would require a delivery platform for existing handsets as well as an application service platform so Telefónica Móviles could manage provisioning and legacy integration.

Involving Sun in the project made sense, since Telefónica Móviles already had in place Sun Fire servers and Sun StorEdge arrays running the Solaris Operating System. Extensive research proved to Telefónica Móviles executives that Java technology offered the best foundation for the carrier's next-generation wireless solution. The platform would allow rapid provisioning of content from third-party developers through its widespread acceptance and support of open standards.

The Opportunity

The solution Sun recommended included Java 2 Platform, Mobile Edition (J2ME platform) technology as the basis for delivering the services, and Java 2 Platform, Enterprise Edition (J2EE platform) technology as the engine driving application services. This end-to-end solution stood in stark contrast to proposals from other technology vendors, which did not offer solutions to address all the carrier's needs, according to the case study.

"We saw that J2ME (technology) presented an opportunity to provide new experiences to our customers, while also increasing their use of our services," says Norman López Manzanares, partner manager at Telefónica Móviles España. "We're able to provision new applications seamlessly from third-party content providers. As a result, we can offer our customers virtual real-time access to rich content and functionality to hundreds of applications and services."

To help sustain high availability and scalability, the company is also using Sun Cluster 3.0 software.

"Sun not only brought extensive experience in the architecture design of the services delivery platform, but also in the underlying server and storage platform, helping us design a redundant platform infrastructure with no single point of failure," says Enrique Piqueras, program manager for the Java-technology based wireless services project at Telefónica Móviles España. As a result, Telefónica Móviles can sustain availability in excess of 99.9 percent.

The Results

With Sun's assistance, Telefónica Móviles solidified its architecture design in just six months--30 percent faster than it would have otherwise, according to the Patricia Seybold case study. In addition, Telefónica Móviles estimates that it will be able to cut the length of future development cycles in half.

"Sun has a strong understanding of our business requirements and technology challenges," says Piqueras. "The (Sun) team has been instrumental in helping us achieve our quality-of-service requirements."

Today, Telefónica Móviles' mobile services architecture--both the services delivery and application services platform--is designed to accommodate up to 100,000 concurrent subscribers and 500 concurrent users. At last count, more than 8,000 registered users had signed on and could access 48 applications from 30 content providers, a number that is expected to double by year's end. The carrier expects the number of content providers to reach triple digits by 2005.

But the key benefit of Telefónica Móviles' Java technology-based mobile services is the new revenue streams it has opened up for the carrier. Thanks to the services it offers third-party content providers and the increased average airtime from subscribers, Telefónica Móviles expects to achieve 100 percent return on investment within two to three years. And as one of the first carriers to deploy services based on Java technology, the company already has a competitive advantage over other service providers.

To have industry-specific articles like this delivered automatically to your e-mail box, join Sun's Executive Boardroom.