Traditional telcos have known for years that they need to undergo an operational, cultural and business process transformation if they're to remain relevant to their customers in the decades ahead, but implementing that sort of transformation is tough, especially when you've got millions of customers to serve, networks to run and shareholders to keep happy.

Increasingly, the introduction of non-traditional services, particularly those built around cloud models, is proving to be the catalyst for change and that, at least in a small but meaningful way, is the case at Telia Company , according to a senior executive responsible for a relatively new but strategic and growing division within the business, which has operations in the Nordics, eastern Europe and Eurasia.

Less than a year after its launch, Telia Sense, the operator's connected car services business, has had a significant impact on how the operator views its role in the digital world and how it believes it can approach new business opportunities, according to Jens-Peter Meesenburg, head of industry verticals for Telia's Global IoT division.

Talking to Light Reading recently to provide an update on Telia Sense, which launched in Sweden in November 2016 using a cloud services platform from specialist vendor Springworks AB , Meesenburg noted that the connected car service has forced the operator to behave differently and become an "orchestrator of partners," playing a central role in a broad ecosystem. (See Telia Wants Driving Seat in Connected Car Biz.)

"Being able to manage and orchestrate partnerships and deal with an ecosystem is a new role and an important step for telcos," notes Meesenburg, who says his team was in discussion with partners for a year before the service was launched commercially.

"We have also learned that it is about the whole ecosystem -- we had to have discussions with other participants for a year before we could launch, and we have been working with companies that we've never had dealings with before. Those other companies want to work with us to help transform their businesses. For example Bilia, the biggest car dealership in Sweden, is using the data provided by Telia about their customers so they can be more proactive, and less reactive, in the way they do business."

Figure 1:

That process, and the evolution of the Telia Sense business in the ten months it has been active, has provided an insight into how a company such as Telia can play an enhanced role in the communications services market, beyond providing connectivity and delivering standard comms services. It has also taught Meesenburg and his team some invaluable lessons about the changing operational landscape and what makes pragmatic sense, for example, when it comes to the topic of big data and analytics (more on that later).

No sleeping at the wheel, please…
Just like the drivers of the cars it's connecting, the Telia Sense team needs to be alert, reactive and ready to change direction at short notice. "The initial plan was to target the B2B market, but we quickly found that there was an appetite in the B2C mass market, that consumers had a willingness to pay, and that has worked to our advantage -- working in the consumer market has helped us to be very end-user focused and that, in turn, has helped us in our approach to the enterprise market. Key to all of this is to be able to set up a plan and then be able to change it -- that has been our experience." Also key to enabling that change is "engaging in business process reengineering with partners."

With that approach, Telia has been able to evolve its service quickly within its first year, says Meesenburg. "We thought we had launched a viable product but users quickly told us what was missing, and we have been able to change our roadmap based on customer feedback. This has been a big lesson learned -- we have been able to adapt quickly to meet market demand, much quicker than the two-year reaction that is normal for a telco."

So how successful has the launch been? Not good enough to share customer numbers or financial details as yet, but the service was quickly rolled out to another market -- Telia launched its connected car service in Denmark in late June -- and another launch is in the works. "We are not sharing customer or traffic volume data yet, but we are on budget, and plan to launch services in a third country by the end of the year."

And there's a sense that, now it has services launched and is learning fast about what does and doesn't work, the operator is keen to ramp up the connected car business as quickly as it can. "It's a battle for the port -- there's only one OBD [on-board diagnostics] port in each car," notes Meesenburg, adding that this service is also an important part of a larger puzzle. "We see the connected car, as do other telcos, as part of our smart city strategy. We need to look at this as part of a bigger picture -- making services available to users beyond the home and business and into the wider area."

So who is it battling against for that OBD port? Telia expects non-telcos to enter the market -- large insurance companies, for example -- but in the Nordic region the main potential rival is, as usual, Telenor, "but it pulled out of its launch in the summer," crows Meesenburg.

Telenor, had, indeed, been preparing a launch and announced a pilot of its Telenor Connect service in late January this year. (See Eurobites: Telenor Tinkers With Connected Car.)

But the Norwegian operator confirmed to Light Reading in an emailed response to questions that it "recently decided to close down the Connected Car project, after considering a number of issues related to the project and solution -- time spent to get the product up and running, lifespan of the product, complexity, cost etc."

Currently, then, Telia has an opportunity to build a commanding position in the Nordics, but it's still early days. Meesenburg notes that there are "about 8 million cars in the Nordic region -- we have a long way to go." But the current set-up is geared for significant expansion -- "the Springworks platform is capable of handling a user base of about 2 million" -- and the target is to break even within the next year. In Sweden, users pay about 100 Swedish kronor (US$12.55) per month for the basic service and then purchase additional partner services on top: "That is a good margin business for us," says the Telia man.

Next page: Battling perceptions and working with a Swiss army knife

Battling perceptions and working with a Swiss army knife
One of the biggest challenges for the Telia Sense team has been in marketing, as the connected car suite of services is a completely new offering in many ways.

"We are essentially selling new behavior, with many different elements -- it's like a Swiss army knife. Each customer has a different set of requirements, as each customer is using a different set of features from the menu of applications. It has been a major challenge to explain all of the different scenarios in an efficient way.

"It has also been a challenge to break down the barriers about what kind of service customers would expect to buy from a telco -- for example, roadside assistance is not a service that anyone associates with a telco," adds Meesenburg, who says the solution is to step back from trying to be the single point of marketing about everything. "Maybe it shouldn't be Telia that pushes the partner services so strongly ... The partners can focus on marketing the services" that are their specialty, he notes.

Avoiding a crash
The technology Telia has been using has been much less of a challenge, claims Meesenburg. "The service is running using dedicated SIM cards on a dedicated M2M network, with its own monitoring, while the uptime from the Springworks platform is telco grade. It has been very easy to perform firmware updates over the air" to the in-car devices, which (in Sweden) have been supplied by ZTE, says the Telia man.

Since launch there have been "no major problems with the end-user technology -- our service has not caused any major problems. Where there have been bugs, we have been able to fix them very quickly. We have taken calls about various applications not working but nothing that has ruined a customer's car or caused a crash -- safety has been very high on our agenda. Nothing should be disrupting a car while it's moving," states Meesenburg, reassuringly.

Figure 2: Jens-Peter Meesenburg, head of industry verticals for Telia's Global IoT division: "Being able to manage and orchestrate partnerships and deal with an ecosystem is a new role and an important step for telcos."

Mining the data
Dealing with, and analyzing, all of the data being collected from the cars could have been a minefield for the Telia Sense team, which is only seven strong (though supported by a larger sales and operations team).

One of the team is a dedicated data analyst, who is also responsible for data privacy, which is naturally of great importance to customers. "We are very cautious around privacy, especially ahead of GDPR [General Data Protection Regulation]. The perception is all important -- even if you have everything sorted and in place, the customers need to be convinced of this. We have had to be very clear on consent around the storing and use of anonymized data, and the sharing of that data with third parties."

Meesenburg has also had to be careful about keeping the data analytics processes as simple and pragmatic as possible. "A lot of people talk about big data, but it's important not to set the bar too high -- we don't want to get too ambitious about what can be achieved with analytics. There is a big impact on the way you operate once you start to make decisions based on analytics. The big challenge is to act on the results, rather than focusing on doing the analytics ... Don't do analytics for the sake of doing analytics -- don't let the data scientists go crazy!" he advises.

So the Telia Sense team does some limited analytics on the data it receives from the Springworks platform -- "we crunch that data and also send it to our partners. We do some limited analytics, but it is mainly our partners that are more closely analyzing the data" to help develop new offerings and help with marketing plans.

How the resulting data is used shows how Telia Sense is evolving its service to customers based on their feedback. "We found that people like to be told that things are OK, not just alerted when things are not right. It's good to know that things are working as they should be," so simple data sets are sent back to the connected cars to provide customers with updates on what is working as it should be in the vehicle. In addition, customer research showed that a high percentage of cars were failing emission tests in their annual technical appraisals, so now emissions data is sent to customers so they can track that metric. "Customers want stats!" says Meesenburg.

Engaging with the broader telco community
Telia Sense is not only learning from its customers and partners but also from other network operators that are developing connected car services.

Partner Springworks, in which Telia holds a 30% stake (for which it paid about $3.8 million in 2015), plays a key role here, as it puts other operators in touch with Telia as it engages in pilots and trials around Europe. "Through Springworks we are talking with other telcos and sharing our business experience. We have also taken part in some workshops with other European operators around IoT, for example through the Global M2M Association," which includes Deutsche Telekom, Orange, Telecom Italia, SoftBank Mobile, Bell Mobility and Swisscom among its members.

And apart from launching into a new market in the near future, what's next for Telia Sense? Meesenburg is always looking to add to the portfolio of partners and value-added services and is looking at how in-car entertainment services can be supported via the Telia Sense platform.

— Ray Le Maistre, , International Group Editor, Light Reading