Mavenir, experts in the transformation of mobile networks from 3G to 4G to 5G, has introduced some innovative new solutions that are giving power back to the operators in their battle against OTTs. The acquisitions of Argyle Data and AQUTO have enabled the US technology firm to create solutions which provide operators with the opportunity to monetize data outside of pre-paid plans and peer-to-peer messaging.
Telecom Review managed to secure an exclusive interview with BG Kumar, President of Core Products at Mavenir. The charismatic Kumar outlined in detail how the acquisitions of both Argyle Data and AQUTO could serve as game-changers for operators who are desperately seeking new ways to generate revenue in a bid to fight back against OTTs and declining revenues.
Kumar highlighted the growth achieved by Mavenir globally in 2017, its announcements at Mobile World Congress 2018 and its investment strategy in the Middle East region, saying the market represented a huge opportunity for growth and new business.
Mavenir has enjoyed phenomenal success globally in the last twelve months. But what is it that differentiates Mavenir from its competitors?
I think there are a few things that differentiate us from the rest of our competitors. If you look at Mavenir from when we started the company ten years ago, we did so with software in mind. We were 100% a software solution firm. We didn't want any proprietary hardware, it was purely software. So what we were able to do was ride the technology curve. We went from software to virtualization and we've been continuing to adapt our software very easily because we are the only 100% end-to-end software-based provider.
The other advantage of our software solutions is that they are very modular, which enables us to bring in new services and features very quickly without having to plumber-architect the entire system. From a technology perspective, that is what has really helped us to move quickly and disrupt the old traditional vendors.
However, I feel the real value in Mavenir is our approach - we always look to solve operators' problems. That's our mantra. So all the solutions we've introduced have been geared to solve problems from an operator's perspective. We always ask how to help operators to grow their revenues, because if they're successful, then that's how we're going to be successful.
How can operators take advantage of the business opportunities and revenue streams created by 5G?
Mobile operators desperately need new sources of revenue, as their voice and messaging services are under increasing pressure from OTTs, and they need to take cost out of their networks at the same time. Therefore, they must stay ahead of the curve when it comes to 5G revenue and cost reduction opportunities. By deploying Mavenir's cloud-based core network architecture today, they can eliminate the expensive hardware, long upgrade cycles, and years of advance budgeting that traditionally characterize operator networks. This means that operators can be ready today to offer services to both 4G and 5G subscribers and easily scale to support mobile edge computing use cases and other 5G revenue generating use cases as they develop. We are equipping operators to go to battle with web-scale companies like Amazon, Facebook, and Google so that they can offer innovative, revenue generating services quickly, and at a far lower cost base than previously possible for operators, using agile development environments that will speed time to market.
Mavenir recently announced the acquisitions of Argyle Data and Aquto. Can you outline for us what impact these acquisitions will have on enhancing protection of mobile devices and the Internet of Things as well as increasing operator revenue?
Argyle Data has been a company that uses advanced technology like AI/machine learning in the context of fraud prevention, fraud detection and DDoS protection. So that's where they come from, and they've got a diverse range of brilliant security products. Mavenir already has a very comprehensive security portfolio, but this acquisition is a fantastic complement to our existing range of applications. It's a very good compliment as it's built on our solution, which made it more complete. But what was really surprising, once we acquired the company, was that machine learning technology is now being applied to non-security use cases.
In addition to launching a Messaging as a Platform application, we've also recently bought a company called AQUTO. What AQUTO does is connect enterprises to end subscribers and give operators a way to monetize data.
Today, what all operators do is sell a data plan, and they get nothing out of how the data is used. However, with AQUTO, enterprises can talk to the end customers and push advertisements to them. Once the customers watch the advert they receive free data minutes, for which the enterprises pay the operator. Since sponsored data monetization offers a revenue sharing model for operators, there's no capex or opex spending. Operators enjoy new revenue streams from sponsors, increased data monetization, and up to a 15% increase in ARPU for prepaid subscribers. On top of increased revenues, we've seen that 75% of users have a more positive attitude towards the operator and are less likely to churn when they have unused data rewards in their account. We believe we can rejuvenate the prepaid market with a true revenue generation solution for operators.
And now we are taking this a step further- from free sponsored data to free sponsored messaging. Today, peer-to-peer messaging is free. However, with our acquisitions of both AQUTO and Argyle, we can provide contextual ads in a peer-to-peer messaging communication. This is really powerful for the operator because a service that was previously free can now be monetized.
Operators are under intense pressure from OTTs, but they have to fight back. If you look at Facebook, for example, they're using an operator's data network and they're running ads which is subsequently making them a lot of money. So why shouldn't operators be able to do the same thing? So what we're offering now, with the introduction of the MaaP platform, driven by AQUTO's technology along with Argyle Data, is enabling operators to monetize this business.
Mavenir recently announced an industry first Mobile-Native Unified Communications and Collaboration as a Service (mUCaaS) solution. Can you outline to us in detail what the benefits of this innovative solution will entail?
If you look at UCC traditionally, it has always been the play of wireline operators, while mobile operators, on the other hand, are constantly looking for ways to find new revenue generating applications. What we discovered following comprehensive research is that the majority of people around the world, even if they have a desk phone, conduct most of their communications via their mobile phone. So what we've done is taken the mobile phone and made it the centerpiece for a UCC application.
A decade ago, this same practice would've been applied for the desk phone. However, nowadays people don't spend time on their desk phone. They prefer to use their mobile phone for all their communications, even when they're working in the office. So that's how we differentiate ourselves from our competitors. This is a mobile-native solution that leverages what the mobile network operators already have, and can also interoperate with desk phones.
Traditionally, most of our other competitors that come from the wireline space provide a desk phone, which is a wireline solution, and provide an OTT client for mobile phones. If it's an OTT client, then the problem is you don't have good quality of service. You're not going to conduct business calls on an OTT client because you want the voice quality to be guaranteed. However, with a mobile native solution now running on your VoLTE networks, mobile operators that traditionally only sold data plans or minute plans to enterprises, can now generate new revenue opportunities by offering a full UCC solution to enterprises.
Mavenir has enjoyed growth on a global scale in 2017. How did Mavenir perform in the Middle East last year?
Growth around the world has been fantastic this year. Some of our core businesses have been growing in high double digits. So it was a really fantastic 2017.
The Middle East in particular has been an area of focus for us. We've enjoyed growth across the entire Middle East, most notably in Saudi Arabia and Turkey, and we're delighted at how our business is growing and the traction we're getting in these markets.
As a result of this success, Mavenir has decided to invest further in the Middle East over the forthcoming years, as we believe there are a lot of business opportunities in the region. Most of our revenues today come from the North American market, but we're very focused on both the Middle East and Europe. In relation to the Middle East specifically, we're investing significantly in operational resources so that we can support our customers better with all the new projects we're embarking on.
When do you think operators in the Middle East will be in a position to deploy 5G networks, and what are the biggest obstacles they are currently facing in their efforts to commercially deploy 5G?
We are seeing a lot of interest from leading operators in the Middle East, and a willingness to invest in their networks to prepare for 5G. They realize the revenue 5G use cases will generate and that they must prepare now. The fact is NFV is not only a prerequisite for 5G deployment, but a critical technology shift that operators must make to survive economically today with 4G, and moving forward with 5G. Fortunately, several operators are now in initial NFV deployments.
Some of the obstacles Middle East operators face is of course, the cost to install infrastructure, and the fact that 5G spectrum will have lower building penetration, which will be a challenge since many of the buildings in big cities are made of concrete and glass. As the industry's only 100% software, end-to-end provider, Mavenir is uniquely positioned to help Middle East operators move to NFV sooner rather than later, and by doing so, they will be ready for 5G.