CEO News

Operator? Get Me The World

SMEs no longer simply worry about whose IDD rates are the best. They now demand better service, bigger bandwidth, and telecom providers with global links, to support regional expansion.

In the ultramodern serviced offices of CEO Suite in Raffles Place, there is a “Zen” lounge. It is a place where busy jet-lagged executives can snooze and relax, forgetting their dreams of world domination. When they wake, however, they will need the security of knowing that their infrastructure in these rented offices is working perfectly and that they can reach their business partners over phone, fax or e-mail, be they down the hall in the next office, or across the globe in New York. That’s where General Manager Carole Khoo’s headaches begin.

In order to give her clients that peace of mind, she needs a business telecommunications infrastructure that is stable, secure, ultramodern and yet cost-effective enough to benefit both her company’s bottom line, as well as to pass on those savings to her customers (See story, Calling on Global Telecoms Partners).

CEO Suite’s business telecommunications dilemma is not unlike that facing many SMEs in Singapore today. Gone are the days when companies merely worried about which is the carrier with the cheapest International Direct Dialing (IDD) rates, or the most reliable handsets.

In fact, telecommunications cost is often the least worry for many SMEs these days. Recent telecom liberalisation and the entry of new telecommunication players in the market has led to a wide array of cost-friendly, attractive packages and more choices for subscribers to choose from. With higher demand for new infrastructure and services from more providers, savings have been passed on to consumers in the form of cheaper rates for local and international calls, as well as business-grade telecommunication packages.

Net costs

Another force that has helped drive telecommunications costs down is the growing importance of the Internet to SMEs. Where once, a simple dial-up connection and e-mail address were sufficient, small firms now require more from their Internet connections. Faster access, in the form of broadband, with speeds ranging from 128Kbps, whether over leased lines or Asymmetric Digital Subscriber Line (ADSL) modem services are now standard in many offices.

SMEs now need to host e-business portals, manage internal intranets and work with larger MNCs and suppliers over extranets. Says Jude Tan, Business Sales, Business Markets with telco StarHub: “They may need large files transferred from remote locations or branch offices to the head office, or do batch file downloads for remote backups and storage.”

Echoing these sentiments, Sui Wee Chong, Senior Vice President (Corporate and Consumer) with Internet Service Provider (ISP), Pacific Internet, adds: “In the past, downstream speeds were more important. Now, uploading of documents and files is an important need for our users.” He cites the example of the legal profession, where lawyers are now required to use an electronic filing system to send large volumes of case files to the courts.

Customer relationship management (CRM) is also a growing issue of concern, with more companies setting up call centres to handle inbound and outbound customer service requests to retain their competitive edge, observes Francois Seveque, Marketing Director for Alcatel’s e-business networking group.

He adds that studies conducted in Europe and the US in the SME space have found that typically, as in Asia, SME firms further face the additional challenge of buying their equipment and business telecommunication needs, such as voice services, handsets, messaging and local area networking from disparate vendors. “This is a big problem for SMEs because they cannot control their telecommunication needs. Additionally, they often do not have the resources for a telecoms or IT expert inhouse.”

Even here, firms have a host of solutions to choose from. Local telcos such as StarHub and SingTel both offer Internet access solutions, managed hosting and Internet data solutions, aggressively bundling them with voice and fixed-line services in affordable packages. StarHub, for instance, offers packages, where new ADSL customers get good discounts off IDD, and $100 to $200 discounts off their mobile phones. Even pure Internet Service Providers such as Pacific Internet offer more than simple access, with solutions ranging from its Wireless@Work service, which lets firms surf wirelessly at broadband speeds, to a network of Internet data centres for hosting and other applications.

Going beyond price

What then keeps SMEs up at night when it comes to business telecommunication?

“Price is not everything,” says Kent Tey, Managing Director with Keracker Holding, a local promotion solutions provider that has diversified into managing product telemarketing and other value-added services for banks, credit card houses and other lifestyle services. When it did, the company immediately saw the need to get a call centre rolling here in Singapore (see story, Cracking the Competition). “At the end of the day, you’re looking for a service provider who can listen to your needs and provide you with the technology and skills that you need to further your business.” Having to offer new and cutting-edge services such as a Web-accessible customer front end, many SMEs now need their telecommunication service providers to be more than just cheap voice carriers. They look for partners who can also act as business partners and consult on projects such as customer call centres.

Service and support is also becoming more crucial, as the need for round-the-clock availability of these applications becomes more pressing. With so many options in the market—and so many similarly priced, support is often key. Hdbay, a renovation and design portal that attracts several thousand homeowners each year to its services turned to a local Internet Service Provider which it felt would guarantee it that all-important 24×7 availability (See story, Design-and-Build Communications).

Know one’s peers

A key consideration SMEs now face when picking a telecoms solution is also the robustness of the telecommunications or Internet access provider. One gauge is the number and spread of POPs, or points of presence, that a provider may maintain. These link a provider’s local network infrastructure with those of long-distance carriers.

“Peering arrangements are important,” advises Pacific Internet’s Sui. Peering is the arrangement of traffic exchange between Internet Service Providers (ISPs). Larger ISPs with their own backbone networks will tie up to allow traffic from other large ISPs in exchange for traffic on their backbones, and also exchange traffic with smaller ISPs so that they can reach regional end points in other countries, for instance, in other Asean nations.

Service providers are also converging voice services with Internet, mobile and other solutions. Local telcos SingTel and StarHub both run ISPs and business Internet services. So should SMEs run with a telco that also has Internet service provider capabilities, or leave voice and data traffic to different vendors?

Here, local SME strategies have been mixed. Some prefer to work with a single telecommunications provider (including for Internet access, data and other services) because of the convenience in unified billing, perceived competitive price advantages, pedigree and other factors such as service and support. Still, others prefer to keep voice and data separate, to get the best of both worlds—by leveraging the cheapest packages and differentiated services which both parties may provide. Some firms may also prefer to work with a provider that is open to working with a range of other service providers, instead of being contractually bound to work with a sister company, observes Sui.

However, while relatively new here, the concept of telecommunications as a managed service, could prove to be a cost-effective middle ground. One model of this, being piloted by Alcatel together with Hewlett-Packard and three European operators, is to create a package of telecommunication services, from e-mail to voice telephony and Internet access, to Web hosting, to application services which companies pay a monthly subscription for, says Alcatel’s Seveque.

As local SMEs take flight from the local market and set up offices and production facilities, there is often the hassle of finding suitable infrastructure and service providers in a foreign land. Thankfully, with local providers forging alliances or acquiring foreign companies in most regional countries, that headache has eased somewhat. Firms may prefer to continue to work with a local telco’s partners because it provides some assurance of continuity of quality. With plans to go regional, CEO Suite needs consistent standards in any telecom service provider that it works with. Khoo: “When we go regional, we need to have the same level of service. It would be best if we could find one global partner when we expand to other countries. We will be able to benefit with, for instance, better pricing.”