Telenor's - Ericsson

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28 EBR #3 2010
the transformation «« connecting machines «« THEME The experience of an early starter Connecting machines is a fundamentally different business than traditional telecom. As a consequence, Telenor must fundamentally change to adapt to it. This is not a technical issue at all, but that does’nt make it any easier. You need a complete a value chain, all the way from production to sales. NORWEGIAN INCUMBENT Telenor is a pioneer in taking machine-to-machine (m2m) services to the global market on a global scale. Telenor started to work in this area ten years ago, and now offer a wide range of managed m2m services, from tracking vehicles and shipments in transit to reading electricity meters. To date, Telenor has installed close to two million m2m sim cards, with the number doubling each year since 2004. Per Simonsen, ceo Telenor Connexion, and Hans Christian Haugli, ceo Telenor Objects, explain why building a business in machine connectivity is so different from what operators are used to doing. m2m has been talked about for quite some time. What have been the main obstacles to this business taking off? SIMONSEN: I don’t think it is primarily technical problems. It is more about moving from selling products to selling services. This has a huge impact on business processes and business models, and requires quite a substantial shift on the customer side. It is more about the time it takes to change business models and processes than the time it takes to implement new technology. When TEXT Benny Ritzén we talk about customers, we mean our enterprise customers, not the end consumers. And with business models, we refer to our customers’ business models. What are the prerequisites for turning m2m into good business for operators? SIMONSEN: m2m is fundamentally different from the traditional telecom offering and as a consequence, operators must fundamentally change to adapt to it. First of all, it is a global opportunity, because connectivity is implemented in units for global deployments. And secondly, it is applied in life-saving applications, like e-calls and alarms, so it is part of critical products. This means that m2m systems must be top quality. For instance, monitoring the heart condition of a person is completely different from providing communication between two people. And you need to have a business process that is designed to deliver on that need. It is not about just adding an m2m product to your existing product portfolio. You need a complete a value chain, all the way from production to sales, designed to meet the needs of the end customer. And you shouldn’t underestimate that challenge. ▶ EBR #3 2010 29
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Page 8 and 9: details JUST ONE QUESTION ...to Sam
Page 10 and 11: cover story Lucy Küng Basic facts
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Page 14 and 15: cover story Lucy Küng One of the s
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Page 40 and 41: THEME »» why we need them now »
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Page 46 and 47: strategy broadband Australia Popula
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Page 54 and 55: the future of devices strategy The
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Page 62 and 63: details 8 ▶ … OF 10 SPOTS occup
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