Telefonica: making TV more intelligent

Telecommunications International, Sept, 2003

THE NEW generation of IN platform technology can promote more than telephony services: Telefonica Sao Paulo (Telesp) based in Brazil has been an enthusiastic supporter of using IN to develop calling card services that support media partnerships with major Brazilian TV groups in providing interactive services to subscribers. It's another new business model.

The Challenge

The root of this is an evident business need: "We have seen our fixed line business relatively stable," says Telesp's Manel Benazet in an exclusive interview with Telecommunications[R] International, "but [profitability] is being cannibalised by mobile operators which are growing very quickly." With about 12 million subscribers, Telesp is one of three major regional operators in Brazil each of which is franchised to operate fixed line services in a designated area of the country, and Mr Benazet is responsible for residential business development. In telephony terms, Sao Paulo dominates the country. Telesp already accounts for 40% of Brazilian network traffic, partly a reflection of the fact that the San Paulo state accounts for 30% of the national GDP.

Brazil traditionally enjoyed a strong 900 number premium rate market, and it was logical to try to recreate this says Mr Benazet. The strategy has to be "to attempt to monetize audiences using a micropayment system based on a prepaid card system." The new services enable televoting, raffles and competitions designed to bring revenue to Telesp and partner TV companies and increase interest in TV broadcast. But the system needed a good IN system to make it work.

Why Choose Huawei?

Telesp had long established relationships with vendors that provided switching platforms but considered that Huawei was able to offer the most cost-effective solution in a relatively short space of time. In fact, the initial first phase of the IN deployment probably broke records: 50 days to full configuration.

"Huawei were very active in our technical decision making process," says Mr Benazet. Moreover, new IN has the potential to be flexible for a variety of service needs and can be scaled up and meet next generation services.

What is the Outcome?

The IN network has clearly invigorated this business model and satisfaction is high with the IN vendor, Huawei. "We are very very satisfied with their performance and their technical capability," says Mr Benazet, "and I think they are well prepared in R&D [for the future]."

Service launch is still progressing but there are also discussions to take this approach nationally. "We have concluded discussions with the other two Brazilian incumbents to deploy the same model and have a national IN structure to support the national TV net works," he says. And Huawei is also involved in expanding the card facility to Internet applications. Telesp is also expanding operations, having recently acquired licences to operate national and international traffic. New business models need new thinking too, with careful monitoring of call traffic and loading. "You must understand your own network costs and capacity to generate profitability, because you must be very competitive in the final price to the user and therefore you need a lot of calls," he argues.