Business Transformation

Orange Looks to Huawei for IT Overhaul

NICE, France -- Orange is experimenting with next-generation BSS technology from Huawei as part of its Essentials2020 initiative, under which it plans to invest €15 billion (US$16.4 billion) in its networks between now and the end of 2018.

The operator is collaborating with Huawei Technologies Co. Ltd. on an IT project dubbed Orange Shine as it aims to become a more agile and "customer-centric" organization.

Taking advantage of Huawei's technology, Orange (NYSE: FTE) says it will share its network APIs with over-the-top (OTT) partners in an effort to bolster revenues from the provision of digital services.

Huawei is promoting its business enablement suite (BES) as a "third generation" BSS that will help operators to become as agile as OTT players, and the vendor claims to be working with a number of service providers on BES transformation, including China Unicom Ltd. (NYSE: CHU) and América Móvil S.A. de C.V. , besides Orange.

The vendor claims its BES technology will allow service providers to gain a share of OTT revenues by "exposing" capabilities such as billing, charging and payment and thereby facilitating service innovation for OTT partners.

Presenting at Huawei's Open Digital Telco Summit in Nice this week, Jean Yves Leonnec, Orange's deputy CIO, said the operator needed to put in place BSS technology capable of supporting a more agile operating model.

"We've been experimenting with Huawei's solution and we'll soon announce a partnership on this business," he told conference attendees.

One of Leonnec's goals is to phase out the silo-based approach to IT and back-office systems that has prevailed across the organization.

Orange has previously deployed separate customer relationship management and BSS technologies for each of its major business units and its ambition is to converge everything on to a single platform.

But such an overhaul comes with risks and could prove costly, acknowledged Leonnec, who did not indicate how long the transformation is likely to take.

Nevertheless, the operator evidently believes this type of convergence is just as important as the ability to sell a range of bundled products to its subscribers.

"These days you are either convergent or you are not an operator and we need to have this in all of the countries where we operate," said Leonnec.

For more coverage of the strategic pressures and opportunities facing operators and vendors in the communications market, see our business transformation content channel here on Light Reading.

Speaking to Light Reading on the sidelines of the Huawei event, Zou Zhilei, the president of the Chinese vendor's carrier business group, said the BES technology would allow players such as Orange to provide services with more OTT-like agility to their customers.

Zhilei reckons the biggest barrier to the digital transformation of an operator's business is cultural and an audience poll taken at the Huawei event, which was attended by executives from dozens of network operators, indicated there is broad agreement on this point.

Despite that barrier, other major operators are also forging ahead with BSS transformation projects in collaboration with Huawei.

Phil Jordan, the CIO of Telefónica , says Huawei is one of three BSS vendors with which the Spanish operator has been working in 16 countries.

"It's clear that as a business we cannot be digital unless we are prepared to drive huge efficiency and automation and that means simplifying systems, processes and policies through IT," he said at the event. "We've done a good job so far and deleted about 2,000 systems in the past two years."

Orange unveiled details of its Essentials2020 initiative in March, just weeks before reporting results for the January-to-March quarter. (See Orange Earnings Dip on Price Competition and Eurobites: Orange Plans €15B Networks Upgrade.)

The operator aims to triple the average data speeds available to customers using its fixed and mobile networks in 2018 compared with 2014.

Orange saw earnings dip slightly in the first three months of the year, despite growth in its customer base, and blamed tough regulatory and competitive conditions in key markets for the setback.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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