Wholesale/transport services

BICS Looks to MVNOs, OTTs for Growth

Rarely do network players display much excitement about the proliferation of MVNOs. But as the chief executive of BICS, one of Europe's biggest international carriers, Daniel Kurgan has a very different perspective from the mobile operators whose margins are being squeezed.

"They're our fastest-growing segment," he tells Light Reading during a meeting in central London. "They are seeing that by working with us they can improve their time to market when it comes to international services."

Europe suddenly finds itself awash with MVNOs after rounds of mobile consolidation in markets such as Austria and Germany compelled regulators to intervene on their behalf in the interest of preserving competition. Fearful of losing out to rivals with quad-play capabilities, cable and satellite operators are now keener than ever to launch their own mobile services. Having announced an MVNO deal with Telefónica UK Ltd. earlier this year, the UK's Sky is one player that has been talking to BICS in advance of its mobile service launch next year. (See Sky Boasts Record Customer Growth and Eurobites: Sky Goes Mobile With O2.)

Catering to the needs of these companies is not the same as providing international connectivity for a network operator, says Kurgan. "That's a very commoditized business, but we're selling solutions rather than just transport," he explains. "We can be a full one-stop shop for these customers."

Identifying the sale of value-added services as a strategic priority, Kurgan cites BICS' move into business intelligence and analytics as an example of how it is expanding its product offering to customers old and new. SMART Webvision, one of its analytics services, provides customers with a "360-degree view" of their roaming activities, he says, and can be used for troubleshooting and even customer segmentation to support more targeted marketing campaigns.

Besides MVNOs, over-the-top players such as Facebook and Google (Nasdaq: GOOG) are becoming increasingly important to BICS and now represent the operator's second-fastest-growing customer segment. But that is bringing a fresh set of challenges for Kurgan and his team. "They want everything to be automated and we've not had that with the traditional customer base so we've had to review some of our key business processes," he says. "It has been quite painful for us in some cases to make that transition."

Clearly, though, the growing use of data services is helping to offset the pressure at BICS' voice business. Although overall revenues fell by 5.4% last year, Kurgan blames this decline chiefly on the expiry of specific contracts in the first three months of 2014 -- without disclosing further details -- and expects sales to remain stable in 2015 as data picks up the voice slack. The volume of 4G roaming traffic is now increasing by a staggering 50% every month, he says.

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The Americas region represents another interesting growth opportunity for BICS. While the operator has indisputedly been one of the "big players" in Europe, Africa and the Middle East, as well as a force in Asia, its presence in the US and Latin America has been relatively insignificant for reasons related to technology standards. "We've always been a GSM provider," says Kurgan. "But as the Americas shift from CDMA to LTE, we can provide services to mobile network operators in the region."

To address that market, BICS has been strengthening its sales force and capabilities in the region. Last year it opened an office in San Francisco and began ramping up investments in Latin America. "The technology shift means now is the right time for us to build more inroads to that continent," says Kurgan.

With more 4G operators introducing voice-over-LTE services, BICS is also working on the development of a VoLTE transit and roaming service. At this year's Mobile World Congress, Light Reading broke news of BICS' plans for a trial of international VoLTE services involving ten operators. Kurgan says that trial is now under way.

Although Kurgan would not disclose when a commercial service might appear, Japan's KDDI Corp. and South Korea's LG U+ claimed to have introduced the world's first VoLTE roaming service earlier this month, and the South Korean operator has sounded eager to extend the roaming service to other parts of the world. "Fine-tuning everything is proving complex, but we are pushing on VoLTE," says Kurgan. (See BICS Preps VoLTE Trials With 10 Operators.)

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

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