Globe CEO: Cloud and innovation are closely linked

Melissa Chua/Asia Cloud Forum

In 2011, the telecommunications industry in the Philippines saw a major upheaval when Smart Communications, the top player by market share, acquired a controlling stake in number three player Sun Cellular.

As the market’s second largest player, Globe Telecom was strongly opposed to the deal, citing anti-competitiveness; industry observers meanwhile wondered how Globe would stay competitive in the years to follow.

Globe’s answer was to focus on growing its revenue from market’s postpaid subscriptions, while providing consumers with value added services (VAS) in a bid to boost its average revenue per user (a term in the industry known as ARPU).

“We had to get away from being a dumb pipe,” Globe Telecom CEO Ernest Cu said.

Innovation and the cloud

Four years have passed since Globe’s rivals merged and Globe has held its own against the competition. Officially disclosed figures from 2014 showed that while Smart and Sun combined laid claim to 55% of the postpaid segment by market share, Globe alone captured 58% of total postpaid market revenues.

Globe today has 2.4 million postpaid subscribers, up from 700,000 in 2008. While 95% of its subscriber base consists of prepaid accounts, revenue from its postpaid segment accounts for 40% of total mobile revenue.

According to Cu, Globe’s success thus far at growing its postpaid revenue can be attributed to an ongoing spirit of innovation within the firm. Globe has begun positioning itself as a “purveyor of digital lifestyle”, and has boosted income via a range of VAS aimed at fulfilling the content consumption needs of a tech savvy population.

These VAS offerings include subscriptions to music streaming service Spotify and a video streaming service known as Hook, which the telco offers in partnership with Singtel.

Innovation at Globe can be closely linked to the cloud, said Cu.

The telco first dabbled with the cloud in 2011, around the time its rivals merged, although Cu admits that the company back then had not yet begun operating on a ‘cloud first’ model. Ventures into the cloud were limited to “small experiments”, in Cu’s words.

The culture, however, changed in 2013, when Globe migrated its email systems to the cloud. “That served as the catalyst,” laughs Cu. Today, all of Globe uses Gmail and Google’s associated productivity apps and collaboration suites. “Even our internal apps were moving to the cloud.”

According to Cu, the cloud plays a crucial role in Globe’s bid to stay competitive. “We use the cloud for experiments,” said Cu. “With the cloud, we get a quicker time to market, lower barriers to investment and the ability to scale quickly so new products can hit the market quicker.”

Globe has since moved several non-critical albeit important systems to the cloud, such as its bill payments portal. The company also performs cloud-based analytics on data garnered from multiple sources within its systems.

The telco utilizes several products from Amazon Web Services (AWS), not least because the latter played a critical role in altering Globe’s culture to one that operates with a “cloud first” mentality. According to Cu, Globe plays host to several of what he dubs “AWS days”, where AWS experts, including AWS CTO Werner Vogels, would raise awareness of the various AWS products among Globe’s product developers and system owners.

Perhaps not surprisingly, Globe’s latest innovation is one that involves the cloud. The company launched a series of what it terms “GEN3” retail stores starting end last year, and the outlets focus on augmenting digitally savvy consumers’ store experience.

The new stores host several lifestyle zones featuring the latest devices, apps and services offered by Globe, with illustrations portraying mobile and broadband technologies as connected solutions.

While regular stores give out queue tickets, the Gen 3 stores take down the names, phone numbers and photographs of customers, so consumers can browse the store while waiting. An automated system, hosted on the AWS platform, will notify customers when their turns come. Globe aims to deploy this queueing system across 300 of its retail outlets nationwide.

According to Cu, there are several differences between the GEN3 stores and traditional telco retail outlets. The stores operate on a largely paperless culture – consumers applying for phone lines do not fill out paper forms. Instead, consumers fill out e-forms on a tablet, and information in the forms gets automatically transferred to a billing system that provisions the service requested.

Like most telco retail outlets, the GEN3 stores provide a direct communication link to Globe’s call center. However, videoconferencing instead of voice is the preferred communication medium for customers’ interactions with the call center.

“For every app we build today, the question in our minds should be ‘can we put this on the cloud’,” said Cu. “The only limitation that might hold us back is latency.”

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