TA Gains Integration Smarts From M2M Unit

Telekom Austria AG (NYSE: TKA; Vienna: TKA) has joined the growing ranks of communications service providers (CSPs) that are Bridging the Chasm by bringing its network and IT operations closer together through a number of significant measures. (See Bridging the Chasm: A Manifesto.)

It has given a single senior executive the responsibility for IT, core, access and service networks at its domestic group (called A1). That post is currently held by Walter Goldenits, who has been CTO of A1 Telekom Austria AG since July 2010.

According to Armin Sumesgutner, the director of network planning at A1, the appointment of a single CTO at board level is just the first step towards organizational convergence: The operator still has some way to go before it achieves its goal of full internal integration at operational level, which, it believes, will help it offer a "one-stop shop" of integrated products and services to its customers. "What we haven't done as yet is the merger on the lower part," he says.

The operator is, however, learning important lessons about the integration of networks and IT at a group level from its recently created, standalone M2M (machine-to-machine) operation, which has a combined network and IT team from the outset to enable a faster response to market demands. (See Telekom Austria Creates M2M Unit.)

The M2M unit is the "first example of full integration because we carved them out of the normal operation and set up a dedicated team which is fully responsible for all these aspects."

And in many ways the M2M spinoff provides a template for a fully integrated network and IT services setup. "It's a completely new kind of business. We see a lot of new developments [and the] opening of new markets we probably would not have even thought about … it's kind of a new working behavior," says Sumesgutner.

That's a message echoed by other service providers that have adopted new operational models as they branch into new markets and develop new applications, especially cloud services. (See Orange Takes New Language Course, Interview: Mark Leonard, Colt's Bridge Builder and The Top 20 Bridge Builders.)

Broader integration
In terms of convergence, Telekom Austria is doing much more than just bridging the chasm between networks and IT, as it's already in the midst of merging of its domestic fixed and mobile divisions under the A1 brand, a move the operator hopes will help reduce its costs as market conditions become more demanding. (See Euronews: Telekom Austria's Revenues Slide and Telekom Austria Merges Fixed, Mobile Units.)

"In A1, we brought together the fixed and mobile networks," explains Sumesgutner. "What we are working on at the moment is to get the synergies there ... because we had [double] almost all systems."

Once it has completed the rationalization of various systems and integrated the different teams, the operator's next step will be to address the current "chasm" between its IT operations and its core and service networks at a functional level.

Since the fixed/mobile merger was announced (mid-2010), Telekom Austria has been bringing together the people in the different teams. "So the IT guys [from fixed and mobile] merged together, and the same for the networks ... The next step is the more functional integration," adds Sumesgutner.

During the next two years, Sumesgutner says Telekom Austria's goal is to "bring core and service networks closer to the IT guys."

He notes that the core and service network are already pretty close to IT from a "customer orientation" point of view. "They will merge on a mid- to long-term phase," he says.

But not everyone will come under the same roof. Sumesgutner notes that the real "hardcore" network divisions that manage the actual network assets in the ground are still separate and will remain so.

"The real network -- assets in the ground such as fiber, copper, microwave networks, active networks -- are not at all integrated because there is no direct relationship," he said. "That said, one exception is probably the OSS, because in the OSS part we see a lot of commonalities, and we also see a driver already in our organization to bring those guys together."

The company’s goal is clear: to be a "one-stop shop" for all products and services, to reduce the complexity of services and to drive the integration of products and services for customers.

"That is one clear message we also give to our customers," says Sumesgutner. "So the customer has just one hotline, one bill … and all the products from one operator. In order to achieve this you have to do this kind of integration."

Shutting down the PSTN
To achieve integrated services and reduced complexity at a technical level, the operator is in the process of shutting down its PSTN systems and switching to its next-generation voice platform. "At the moment we are working on a full integration of IMS [IP Multimedia Subsystem], consisting of voice [and] also multimedia services such as our IPTV platform," Sumesgutner says.

So far this kind of integration has happened on an individual project basis, but Sumesgutner says Telekom Austria's ultimate aim is to have a broader integrated approach for all future products and services. "We have also have been working on cloud services and M2M services. These are clear strategic goals for our group."

— Anne Morris, freelance editor, special to Light Reading

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