Telecommunications Management: a juggling act
There is no consensus regarding the origin of juggling, but one of the current schools says that it is an ancient Chinese art. It consists of simultaneously manipulating objects with agility and precision. According to experts in the art, dexterity is a function of some essential elements: constant practice, concentration to avoid the interference of external elements, laterality, reflex to correct deviations and the study of technical principles.
Telecommunications managers, in our view, are real juggling artists. They need to simultaneously handle numerous issues in order to play their role and efficiently and effectively fulfill their responsibilities in companies.
First, they are internally held accountable by the business areas of the companies in which they work to respond quickly to the demands for more data, mobility and collaboration in communication, information security and processing speed. This is just to focus on those more evident demands, which aim to provide better quality services to companies' customers.
According to a study conducted by Cisco, the monthly volume of IP traffic over Brazilian networks will reach 3.5 exabytes in 2016, compared to 420 petabytes in 2011. Just to have an idea, it is as if each of the approximately 80 million of internet users traveling the equivalent of 2 DVDs per day (which, of course, today would not even be possible, given the low quality of the networks available in the country).
This is due to the growth in the mobile device use, the expansion of bandwidth plans and the expansion of the services offered. In fact, looking at the evolution of the number of connections, this trend is very evident. From 2006 to 2012, the number of cell phones jumped from 99.9 million to 261.8 million, and the number of broadband accesses went from 5.7 million to 17 million, according to the Teleco portal.
Judging also by the behavior of people using their mobile devices more intensively in the work environment, and the need to increase the practice of home-office due to urban mobility issues, this situation further amplifies the pressure on telecommunications managers in internal business demands.
Second, managers also need to balance an issue of an extremely complex nature, which is the relationship with telecommunications service providers. This complexity reflects several factors, among them: the huge (and most often confusing) offer of services, technologies and plans, service provision contracts that are difficult to understand, lack of uniformity in the way operators segment the market ( which leads, for example, the same customer to be served as a large company in one provider and as a medium company in the other), non-homogeneous technical service in the country due to a lagged infrastructure (problem of non-uniformity in coverage, mainly, of corporate data networks and mobile devices) and proven low quality in the provision of services (SLAs – Service Level Agreements) missed, billing errors, delay in repair and cancellation problems, so as not to tire the reader with the extensive list of offenders.
However, we are going to focus on two aspects that stand out the most, especially since market evidence is very striking and requires managers a lot of coordination and attention (and why not say patience) in the art of balance: the question of infrastructure and quality.
With regard to infrastructure, there is a general consensus (customers, government and operators) that it falls far short in terms of coverage and modernization. However, the barriers to something concrete appear to be insurmountable. The operators claim (rightly) the heavy tax structure as one of the main elements that prevent them from investing more, but they also cite the lack of qualified professionals in the market in sufficient quantity and difficulties in terms of regulation.
On the other hand, the government criticizes the operators' behavior, saying that their strategies provide exclusively for the profitability of the services already launched. Anatel demands from the Legislature an advance in the regulation of the sector, since the General Telecommunications Law, of 1997, is very concentrated in fixed telephony, and also charges the private sector more organization to formulate public policies.
In mathematics, we call this an unsolved equation. Looking at the sector's figures, we see, for example, that the percentage of municipalities served by only one cell phone operator is almost 40% (source: Anatel). Another critical point is the average speed of SCM accesses in Brazil: an incredible 2,192 Mbps (Source: Akamai). Now, think about the mission of a telecom manager who needs alternatives to serve your company's branches, or stores, in terms of capillarity and speed.
While the gap between the evident investment needs and the stimulus actions is clear, it is the telecommunications managers who end up suffering the most from the impact of an inadequate infrastructure.
In terms of the quality of service provision, the evidence is even clearer to prove the arduous task of companies' telecom professionals. A recent test conducted by Simet (Internet Traffic Measurement System), controlled by Ceptro (an agency that aims to study the situation of the network in the country), evaluated the quality of services provided by cell phone operators in 3G technology under different aspects (download and upload fees, latency and packet loss rate).
Regarding the packet loss rate, only one operator was better than the standard of 2%. Packet losses during a VoIP call cause the call to “prick”, hindering the conversation's understanding. Regarding latency, none of the operators reached the value of 80mS (milliseconds), considered ideal by Simet. Latency is the time it takes for information to go to and from the user. Analyzing the main offenders in Anatel's Call Center in 2013, both for fixed and broadband and mobile telephony services, the first three positions (with more than 50% of the cases) were Collection, Repair and Installation.
In short, there is weakness in the entire service delivery cycle: installation, supply, repair and billing. This theme is very critical for the telecom manager, since it is implicit in his responsibility to ensure that the service provided to the company's internal or external customers works properly, within the agreed quality levels. With these key quality indicators observed with service providers, it is very unlikely that managers will be able to guarantee a smooth operation.
A third element to be balanced is the question of efficiency, the famous motto “do more for less”, without obviously calling into question the level of quality in the provision of the service. Especially at times like the current one, when the feeling of uncertainty and lack of confidence in the growth of the economy hangs over the market, the search for cost reduction, ensuring at least the maintenance of the existing SLAs, becomes an objective to be pursued by companies, as a source of improving operating results.
However, some factors, such as the lack of information on accounts, tariffs, current contracts, existing assets and resources, and the lack of knowledge regarding market prices (by type of service, contracted volume, country region and provider) service) and the existing alternatives in terms of services and operators create barriers for managers to conduct a thorough cost reduction processes.
It is not just a matter of establishing a market price! A well-structured renegotiation process can increase the percentage of reduction from 10% to 15% for rates above 40%, with a well-structured approach. Our experience reveals that special knowledge of the operators' business, contracting conditions, market prices and specific negotiation techniques in this industry makes all the difference for the manager to successfully balance the tricky issue of efficiency.
The last and no less important component present in the list of items that managers need to balance is the topic of regulation. Some recent public statements by Anatel are in line with the defense of changes for the sector as well as at the legislative level, which is outside the agency's jurisdiction. According to Anatel, the General Telecommunications Law, approved by Congress in 1997, is obsolete, as it still focuses on fixed telephony and does not present specific deals for the corporate market.
For example, the rule regarding the deadline for returning a request made by the customer to the operator does not specify the maximum number of days the operator must respond when it comes to a request related to landline telephones (defines the period from 5 to 10 working days for mobile telephony). When a company receives a billing dispute, the regulation also only specifies the response time (30 working days) in the case of mobile telephony. The telecommunications services provided in the public sector (fixed telephony) have their existence, universalization and continuity ensured by the Federal Government, therefore, the service provider cannot refuse the assistance of those interested in contracting the service. It is has been seen in the market that some operators choose not to provide quotes to customers interested in promoting a price negotiation.
Returning to the parallel of juggling, a determining factor in the achievement of greater dexterity is the knowledge of the technical principles that govern it. More specifically, there are mathematical theories that help the practitioner to be more precise in the art. Likewise, translating to the corporate environment, there is specific knowledge that makes it more likely for managers to face these challenges.
There are also companies that specialize in supporting telecom executives in the balanced management of these elements. Due to the nature of the issues raised, it would be naive to expect a miraculous external solution, since the answer is not only in the hands of managers. However, there are companies that can make a significant contribution to the management of the weather conditions to which executives are subject.
Some specialized consultancy services have a knowledge base regarding the prices practiced in the market (by volume, service, region) that help managers to address the issue of cost reduction in a more assertive, fast and efficient way. The domain of regulation of the sector is also part of the specialized knowledge, which can support managers in a decisive way in the elaboration of more flexible and optimized contracts. It is also within the scope of action of some companies to systematically monitor the level of quality of services provided by the operators, with an organized process to identify and act quickly on eventual failures, actively taking the appropriate measures with the operators.
Innovation, agility, quality, efficiency and regulation are the complex challenges that telecom managers need to face. Balancing all these aspects makes them true artists.