Telefonica UK: Moving Beyond Traditional Services

Telefonica UK is the second biggest mobile operator in the UK. The company is always exploring new ways to expand their operations and business. Telefonica UK is one of the leading mobile operators who have been able to capitalize on real time location information of its subscribers to generate revenues from location based advertising. ZTE has cooperated with Telefonica UK on the passive data collector (PDC) to deliver this capability. As part of the successful delivery of PDC, ZTE was also awarded the GMLC contract. Recently, ZTE Technologies interviewed Peter Bailey and Leon Veiro of Telefonica UK. Peter is the messaging and voice business manager, and Leon is the LBS messaging architect. They talked about Telefonica UK’s market strategy and challenges in upgrading their network. They also shared their experience in LBS deployment and their views on the cooperation between Telefonica UK and ZTE.

Q: Can you introduce Telefonica UK and its business?

A: Telefonica UK is a leading provider of mobile and broadband services to customers and enterprises across the United Kingdom. We have our headquarters in Slough, Berkshire, and we have customer service centres in Leeds, Glasgow, and Bury and Preston Brook, Cheshire. We have 23 million customers and 450 retail stores. The company is part of Telefonica UK Europe, and the UK operations are a leader in non-voice services, including text, media messaging, games, music and video. Telefonica UK also offer connections via GPRS, HSDPA, 3G and WLAN.

Q: How long have you worked at Telefonica UK? What has made you stay there?

Peter Bailey: I worked for Telefonica UK for 17 years. I’ve stayed there because it’s a company that really appreciates its people. The company has given me so many opportunities to develop myself and progress my career.

Leon Veiro: I worked in the company for 25 years and concur with Peter. Telefonica UK has provided excellent opportunities to develop my career and exposed me to a range of projects and technologies that have satisfied my thirst for knowledge.

Q: Why did Telefonica UK decide to upgrade the original equipment?

A: This was driven by our need to deliver higher numbers of location lookups and greater volumes of location intelligence without affecting core network cost or ease of paging a mobile.

Q: What did you expect to achieve after the upgrade?

A: We expected the network to allow Telefonica UK to lead the industry in location-based advertising. The network will have lower cost-per-mobile location lookup and significantly higher lookup volumes, moving from the low hundreds per second to many thousands per second. It will provide location intelligence and push the locations of a specified subscriber when they have moved into a specified area. Also, it will be able to maintain location accuracy.

Q: Why did you decide to partner with ZTE on the project? What do you think of ZTE’s technical solutions and engineering performance?

A: The new LBS solution was initiated with an RFP process. There were a few other vendors with similar solutions, but ZTE fitted with our requirements, and they had previous experience implementing a similar solution in another T1 network. Their knowledge of and experience with LBS products has been impressive, and their engineering has been fantastic. On occasions, we have noticed that ZTE could benefit from strengthening its delivery processes for a Tier 1 customer and better managing necessary changes in this area. We have worked with ZTE to close any gaps, and we are pleased to say that ZTE has been receptive to our feedback and has markedly improved.

Q: Have you encountered any problems with the network? If so, how have you solved them? 

A: Of course we have had to overcome some initial difficulties. Integrating eight internal interfaces was complex and required close collaboration between many parts of Telefonica UK. We were challenged by language barriers between core ZTE developers and Telefonica UK. This was alleviated by ZTE providing an English front end. There were also evolving requirements. The initial contracted evolved significantly over the delivery cycle. Although Telefonica UK ended up with a far superior solution, teams were challenged from technical, financial, and delivery perspectives. However, there were positives, such as the great collaboration between ZTE, Telefonica UK, and O2 Media. A great deal of hard work was put in by all parties.

Q: How is the project running now? What is your next priority? 

A: The platform was completed ahead of schedule. Although there were a few teething issues, the PDC has been stable for some months and has great capability.  The output has been throttled to 15% of the traffic present. This is not a PDC issue but more a transport and back-end challenge.

Next on the agenda is to integrate ZTE GMLC into the PDC iVAS platform. It is imperative that we improve location accuracy. 

Q: Has Telefonica UK deployed any LBS services? What are the prospects of LBS in the UK?

A: The flagship LBS service that the PDC is responsible for is the “You Are Here” O2 Media product. This pushes location-based advertising to more than 10 million subscribers. In essence, O2 Media will be able to fence certain areas of the Telefonica UK’s network and will be notified in real time via the PDC if an O2 Media’s subscriber physically moves into the fenced location. Location-based advertising will then be triggered, and an MMS or SMS will be sent to the subscriber. An example of this might be discounted coffee offered by a nearby café when the customer moves into the vicinity of a café.

Q: What is Telefonica UK’s strategy to enhance its position in the future?

A: Telefonica UK will continue to deliver great telecoms services to its customers and will also use its trusted brand to diversify out of the traditional markets into areas such as banking, heath care, advertising, insurance, and security.