Japanese e-commerce giant Rakuten is transforming customer experience. In this interview, Netcracker Strategy Director Ed Finegold talks about Netcracker’s role in enabling Rakuten’s vision.
Digitalization is a trend across many industries, particularly in the realm of customer experience. However, telecoms tends to experience substantial inertia when working to revamp systems, processes and experiences that have been effective for years.
As a result, ironically telecos are not typically recognized as category leaders in customer experience, digital experience or mobile first experience. While it’s true that customer expectations are rising for simple digital experiences with any product or service, there are real economic reasons for mobile operators to digitalize the way they engage with, serve and reward customers.
Rakuten, a global e-commerce giant based in Japan, has announced plans to roll out its own mobile network. Its approach to mobile- and digital-first customer experience is making waves across the global telecom industry and provides a powerful example of the competition and expectations all mobile operators face as the digital era rolls on.
Rakuten’s vision for in-store experiences, digital identity, customer rewards and the mobile lifestyle will be powered in part by solutions from Netcracker Technology. Developing Telecoms caught up with Ed Finegold recently to find out more about the example Rakuten sets for digital-first experiences, and the economic benefits mobile operators can achieve by employing similar approaches.
Who are Rakuten and what differentiates them from other e-commerce providers?
Rakuten offer more than e-commerce – they provide a massive services ecosystem across loans, credit cards, travel, insurance and consumer goods. Customers are considered members of this ecosystem and offered a lifestyle experience that isn’t matched by the major e-commerce giants like Amazon and eBay.
Rakuten operates in over thirty countries and is actively expanding. The company has substantial footprint in Asia, originating as it does from Japan. At MWC19, Rakuten announced that it is rolling out world’s first cloud-native mobile network, marking the first time that a non-telco has deployed its own facilities-based mobile network.
The mobile network will start in Japan, and the company has stated that their vision is ultimately global.
Given that most digital businesses take a global approach because the Internet is a global network, it makes sense that Rakuten would see things similarly. It will be fascinating to watch this company tackle the challenge of taking mobile, which has always been based on a national or regional model, and turning into a global offering. That might even be the most entrepreneurial and disruptive aspect of what Rakuten can do.
What sets apart Rakuten’s cloud-native mobile network? How does it function?
Rakuten has announced that it will use an entirely virtualized radio access network (vRAN) coupled with a distributed, common carrier-grade telco cloud - so, all of the services and capabilities of the network are cloud-native and software-based. It will utilize, from the start, a 5G-ready, IPv6-based transport network for backhaul with a completely software-defined programmable infrastructure.
The network will also combine mobile-edge computing with SDN-enabled centralized and regional data centres. This is a sophisticated way of saying that it's really architected optimally for software-based and application-based services that can be instantiated and controlled on-demand, as you'd expect to see in any cloud-native environment. This is a real digital-first approach from the ground up.
It will also utilize a zero-touch, end-to-end automation and assurance layer for service delivery, based on unified OSS and BSS. This is very different from traditional OSS/BSS which does not typically automate or integrate all of these functions end-to-end.
So, everything is software controlled and built to very particular specifications to enable a much higher degree of 'on-demand' centralized control with a greater end-to-end automation for service activation, delivery and control than has been achieved in any traditional mobile network. It is also a much lower cost infrastructure. So, it's faster, it's easier to manage, it's much more automated and it costs less to operate, deploy and upgrade and its architecture is designed to make upgrading to 5G seamless. It’s really a digital-era way of looking at how a mobile network can perform and act as a service platform.
Who are Netcracker and why did Rakuten choose you for this role?
Netcracker is the worldwide leader in BSS, OSS and SDN/NFV solutions for CSPs and a range of digital businesses outside of telecom. Rakuten has chosen us to power its customer experience vision and provide a unique approach to revenue management.
We have been named publicly as a key strategic partner in part because we offer an unmatched solutions delivery track record, a very strong technology platform, the right solutions for the particular challenges at hand and an ability to provide those solutions rapidly and on a global basis. In particular, Rakuten Mobile CTO Tareq Amin cited our “shared DNA” for creating innovative solutions to classic problems telecoms and other complex businesses face, particularly in the face of the digital era’s impact on most industries.
How is Netcracker helping Rakuten take a different approach to traditional mobile operators?
One good example people can relate to is found in how Rakuten will redefine how things work in the mobile shop. Billions of people are mobility customers and most of us can tell stories about negative in-store experiences we’ve had with our operators: waiting in the queue; staring at the back of a screen while a staff member types away to do whatever we’ve asked; struggling to make sense of signage and different offers; confusing and seemingly convoluted processes for doing things as simple as upgrading a device or changing a plan. Rakuten wants to do all of this differently and bring a self-serve, mobile-first experience right into the store. The goal of that, for example, would be to reduce a 2 hour customer sign-up process down to 5 minutes, which has clear benefits in terms of the cost to add subscribers, better use of time in the shop to do things such as, say, shop and for the overall customer experience, particularly at the outset of a customer relationship.
Netcracker is providing the foundation for all of this with its customer experience solution, helping to automate the entire shopping, ordering and fulfilment process with a digital- and mobile-first, omni-channel approach from the start. While all of this is important to making customers happy, there’s also a major cost advantage to delivering this degree of automation, commonality across processes and time to execution of orders or purchases. It pushes a lot of the traditional costs associated with manual processes and with fixing associated problems right out of the business. It’s also a much more streamlined IT architecture that doesn’t carry forward most of the cost associated with disparate, legacy IT estates.
You mentioned Rakuten’s ecosystem and a concept of customers as members. How does this change its approach to revenue management – what we used to call billing – and what is Netcracker doing to bring Rakuten’s mobile services into this model?
We usually think in telecom about billing, rating and charging for events or services that are consumed like minutes, messages or data units. This is true for Rakuten, but it’s secondary to a greater concept of value transfer in its ecosystem.
Members are rewarded with a unique points system for everything they do. These points are redeemable for goods and services. So, for example, a mobile bill could be paid with points that are earned by using a credit card or buying travel insurance or home goods through Rakuten. Similarly, using mobile services through Rakuten will generate points that can be used across any other service in the ecosystem.
Points aren’t just for purchasing either - they have status associated with them. As a result, as members gain points, they become eligible for new things, like a premiere credit card with added benefits, free shipping on hard goods, or upgrades on new mobile devices.
Netcracker will be the engine in the background that translates mobile usage into tangible value in this ecosystem, managing the complex eligibility rules that govern the added benefits members earn and access while also communicating that information through management of the end to end customer journey. It’s an exciting role to play, because we can show what’s possible in a pure digital setting with a much broader range of services and entitlements. As service providers in general try to simplify things for their customers and automate more of the rewards and benefits customers can earn, this model can provide a very powerful example of what the possibilities are in a mobile environment that’s become much more about lifestyle than just minutes or data units.
And ultimately, that’s likely where more operators need to end up, because the path to growth is more about adding value and connecting customers digitally to more of the things they need in everyday life. The benefit of this approach to value transfer is that it gives customers a greater sense of working toward something of value every time they use their mobile device. Given how often people use mobile devices every day, that seems like a logical and very powerful idea. Being the technology partner who gets to make that value come to life is a great role for Netcracker.