Ari Viitanen, Managing Director, CBOSS Oy, Finland: «Being shocked first, we realized we got luck»

mforum.ru, March 24, 2004

The recent visit of Mr. Ari Viitanen, Managing Director with CBOSS Oy, to Moscow gave a chance to A. Boyko, a correspondent of Mobile Forum to get an exclusive interview.

MF: The extraordinary deal inspired much interest in your company. Although your place of business is quite close to Russia, the name of your product, I am afraid, has said next to nothing to the Russian market until recently. Could you possibly tell us a few words about your business?

Viitanen: The Company that developed rtBilling has been on the billing market for 24 years. Our business appeared in the early 80-s, within the Nokia Data IT business division. It was when Nokia used to work at IT-products. The responsibilities of our division included development and provision of a billing solution to wireline operators in Finland. In Finland, Nokia represented products of US-based Tandem, the company that manufactured the same-brand platform, and our billing solution was developed for deployment on that remarkable platform and capitalized on every benefit the platform provided. 

Meanwhile, Nokia sold its IT business to UK-based International Computers Limited (ICL) in 1991. However, this deal did not affect our development process and we produced IN-based billing solutions in the early 90-s.

Starting in the early 90-s, we commenced development of IN-solution for TeliaSonera and in 1992 we provided delivery of Intelligent Network. Our charging and a number of value-added services (VAS), deployed on Tandem operated exactly in that network. At that time, only billing was our original product, as VAS portfolio was purchased from a well-known US company. However, VAS applications performance left much to be desired, so, quite naturally, that the next two years were devoted to development of our own VAS applications that could efficiently integrate with billing and be optimally deployed on our platform. 

Then we took up development of real-time prepaid for the same platform.

MF: I have a question, Mr. Viitanen. Could you elaborate on the fact that every time you worked on a solution you had Tandem in mind?

Viitanen: Naturally, the fact that Nokia represented the interests of this American company in Finland, we had very good knowledge and expertise on the platform and an excellent co-operation with Tandem was a strong argument in favor of Tandem. On the other hand, "seven nines" (99.99999 percent) reliability achieved with the platform proved to be strongly attractive for us. In fact, in that platform, there are two independent computers working on every task, which has a very positive effect on the overall reliability. It is not occasional that Tandem is traditionally used in the areas with stringent requirements to fault-tolerance. For example, in banks, stock exchange trading, Visa processing centers.

The mid nineties saw another interesting event. US-based Compaq purchased Tandem business and faced the issue of development or acquiring a billing solution that could operate on the Tandem platform. When Compaq found out that the Finns already had such a solution, they concluded an agreement with us. So in 1995 we commenced development of real-time prepaid. The works took almost two years, however, already in 1997 we got the first customer.

At the same time, after another acquisition, our business was transferred from ICL to Fujitsu. We kept the old name for several years, however after the global re-branding decision in 2002, we got the Fujitsu brand as well. Position of the OEM provider was optimal for the company from Japan, so for years our customers were getting solutions under the Compaq brand, without any idea that it is the Finnish developers that back the globally acknowledged brand. Compaq was engaged in marketing, sales and support of our decision, until the merger with Hewlett-Packard 1.5 years ago. Since then, we continue our successful collaboration with the HP Corporation.

MF: Could you please disclose the geography of your installations? Do you possibly have any figures as to the aggregate subscriber base served?

Viitanen: There are five customers who deployed our systems. The largest one is O2 with its 10M of subs. As for the aggregate subscriber base served by our solutions, it is about 17M as of February 2004.

MF: What is, in your opinion, the main difference of our system in the line of the same-class offerings available from your competitors?

Viitanen: Well, it's hard to judge the same-class offerings, indeed. From the technical point of view, the solution developed in Finland is unique! Here are the facts:

If we look at the competitive offerings, we see that usually, a solution for an operator with a 10M-subscriber base requires a 5 to 20 node intelligent network to deploy prepaid in. Usually, the nodes are Unix-based solutions. We are the only company in the world that is capable to implement such system on the basis of single node, on a HP NonStop server (former Tandem). I think benefits of maintenance are obvious.

The performance margin allows using the same configuration of intelligent network not only for voice traffic, but also for rating SMS, MMS, data, m-commerce transactions, while the system will be able to take up load generated by 10M of subscribers per node extending up to 10s' millions of subscribers in real time with centralized management system.

MF: I heard an assumption, voiced by a prepaid system provider rep speculating that their solution is capable, theoretically, to back operations of the network with 100M subs.

Viitanen: One can play with figures. One can say 100M subs as well with one node, however, globally there are no such systems. Usually, when talking about 100 million subs, one forgets to mention that this holds true only for miniscule load of the network, that is when BHCA  (busy hour call attempts) is low.

I want to be precise. When we are talking about 10 million subscribers with one node, we have BHCA= 0.35 in mind, that is, our system will be still working when one third of all subscribers in the network are placing a call. Our system can process over 3 million calls per hour (over 50,000 calls per minute) per node. At same time, the system can support 25 million SMS messages per 3 hours (139,000 per minute) per node.

Moreover, when we are talking about real-time prepaid, we mean real time. The time necessary for the system to make a decision that is to allow or prohibit a call attempt is 100ms. We know, that some of our competitors call a 10 second delay, the system takes to process a call attempt, real time. However, this is a fraud interval that their systems have, not ours.

Dealing with prepaid subscribers in roaming is not a problem for our system. It is the method roamer data is exchanged between a home and visited network that matters. If it is USSD callback, the subscriber can encounter some delay in the connection time caused by USSD callback. However, if operators support CAMEL, there will be almost no delay, compared to a usual call.

MF: You know Mr. Viitanen, when CBOSS Association purchased the Fujitsu business, the response in Russia came in all colors and sizes. What was the reaction of your team?

Viitanen: Well the fact came as surprise, for sure. We did not expect the buyer would be from Russia. When the first shock passed we started to investigate the consequences of the deal for us.

The visit of Andrey Morozov, President of CBOSS Association, was really helpful. He conducted a meeting with all key managers and specialists of CBOSS Oy, shared his vision of the business prospects. For us, it was a chance for open and direct dialog, we disclosed our concerns and we received answers to every, even most complex questions we had. I think this is a good platform for further cooperation.

At some time we though that a large US company would eventually buy us, and such scenario was quite frightful for us. We believed that it was our customers that attracted the Americans, who would try to persuade them to migrate from existing system, while the Finland division would be probably, out of business. Another scenario of integration of our system into the buyer's product line with further dropping support of our business was quite probable.

Under the circumstances, CBOSS proves the best variant for us. Now we still have the responsibility to develop our product. We can continue our attack on the global market, both with Hewlett-Packard support, and on ourselves, with a fully-fledged CBOSS line of solutions that now features our system too.

For CBOSS this deal is important too. Our solution is the best complement to CBOSS portfolio.

Here are the facts for you. CBOSS had a product line that featured hi-end billing and VAS, while the IN-based prepaid was positioned for operators having up to half million subs. Now there is a prepaid solution that is cost-efficient for networks starting from 300,000-400,000 subs and has close to completely linear scalability to reach 10s' of millions subs with one integrated single solution for voice, sms, mms, data etc.

Although CBOSS has made several successful attempts to enter the international market, using its Finland division as an international launch pad for efficient marketing and sales of the whole line of CBOSS products is very attractive. Within coming months, we will increase our sales and marketing staff, hiring about 15 new specialists.

For us this is a unique opportunity to perform comprehensive benchmark tests of our prepaid system as CBOSS has an appropriate lab in Russia, which is really fascinating.

CBOSS success on CIS markets proves the corporate strategy is really interesting and worth careful consideration. We are adapting this strategy to the requirements of the global market and forecast that in the next years you will see the share of CBOSS solutions grow globally. 

To recap, our vision for the future is in line with the following priorities:
- to build customer-centric business, catering for the needs of our clients;
- to make customer relations stronger, CBOSS reputation impeccable, CBOSS brand recognizable;
- to create strong, manageable, efficient international organization, capable to implement CBOSS strategy.

Alexey Boyko, Mobile Forum.