The first ever specifications for the virtual Residential Gateway were recently released, as the Broadband Forum concluded work on a landmark project to bring the potential of virtualisation into the home.
The Network Enhanced Residential Gateway (TR-317) provides requirements for an end-to-end architecture, creating a flexible and agile environment. TR-317’s virtual Customer Premises Equipment (CPE) eliminates the need to provision and attach new services directly to an end-user’s Residential Gateway and enables Service Providers to do this centrally from their Cloud infrastructures, giving the potential for an enhanced customer experience and significant cost savings.
Service Providers will be able to deploy new services faster and personalize end-user packages, eventually creating significant additional revenue streams. Quality of Service could also be enforced on a per device, per user and/or per service basis, improving the broadband customer experience, which is particularly important with the advent of new and more demanding services.
“This work is extremely significant because many broadband operators are already working on the delivery of some flavours of cloud-based virtual residential gateway services,” said David Minodier, Network Architect at Orange, the Broadband Forum member which led the development of TR-317. “Network Functions Virtualisation (NFV) and Software Defined Network (SDN) techniques allow the delivery of such innovative services from a Point of Presence (PoP) or data center to be envisaged, which was not possible before. TR-317 provides CPE manufacturers with a first set of specifications to ensure interoperability between the bridged residential gateway at the customer premises and the virtual gateway hosted in the Service Provider’s cloud infrastructure.”
The new specification is one of the enablers for the Broadband Forum’s Broadband 20/20 vision which focuses on specific new broadband home and business opportunities that leverage SDN, the NFV distributed compute / network model, Internet of Things and ultrafast technologies.
TR-317 addresses the current heterogeneous nature of the residential gateway which makes it difficult for a telco to evolve existing gateway models, meaning the deployment of new features or services is often delayed, expensive and sometimes not even possible as some old CPE may not have sufficient resources to support a given set of features.
‘Local services’ will be shifted from the home to the network, providing users with highly reliable and expandable virtual storage, which can be provisioned on a ‘pay-as-you-grow’ basis. The machine-to-machine (M2M) Home Automation Box will also move to the network, providing enhanced and easily-upgradeable M2M services.
Parental control per device – for example, to limit services accessed by children – will also be enabled, along with improved diagnosis/troubleshooting/maintenance services due to operators being able to virtually insert a diagnosis tool in the extended home network to troubleshoot problems and support the customer.
Broadband Forum CEO Robin Mersh said: “While the end-to-end architecture has remained fundamentally the same, the business ecosystem has changed significantly, with flagship value-added telco services becoming commoditised and over-the-top companies going from small startups to financial giants. At the same time the consumer electronics industry is flooding residential home networks with new devices. Alongside this, the IT ecosystem has changed and cloud services for residential customers have become commoditised as a result of virtualisation and new generation technologies and network concepts such as NFV and SDN.
“Enabling operator gateway services with the agility of cloud-based software and supporting some new use cases is the purpose of the Network Enhanced Residential Gateway architecture which TR-317 provides.”
Following the release of this initial document, further work to extend its capabilities, as well as new work around the Cloud Central Office (CO) project, will be carried out. This will include evolving the TR-069 protocol to manage the Network Enhanced Residential Gateway components (the Bridged Residential Gateway and the virtual Gateway) and associated services. Requirements for the design of the virtual gateway itself are also being discussed, while the possibility of adding in a capability to allow third parties to provide services via the operator is also being looked at.
VoD cuts the cord in SA
Some 20% of South Africans who sign up for a subscription video on demand (SVOD) service such as Netflix or Showmax do so with the intention of cancelling their pay television subscription.
That’s according to GfK’s international ViewScape survey*, which this year covers Africa (South Africa, Kenya and Nigeria) for the first time.
The study—which surveyed 1,250 people representative of urban South African adults with Internet access—shows that 90% of the country’s online adults today use at least one online video service and that just over half are paying to view digital online content. The average user spends around 7 hours and two minutes a day consuming video content, with broadcast television accounting for just 42% of the time South Africans spend in front of a screen.
Consumers in South Africa spend nearly as much of their daily viewing time – 39% of the total – watching free digital video sources such as YouTube and Facebook as they do on linear television. People aged 18 to 24 years spend more than eight hours a day watching video content as they tend to spend more time with free digital video than people above their age.
Says Benjamin Ballensiefen, managing director for Sub Sahara Africa at GfK: “The media industry is experiencing a revolution as digital platforms transform viewers’ video consumption behaviour. The GfK ViewScape study is one of the first to not only examine broadcast television consumption in Kenya, Nigeria and South Africa, but also to quantify how linear and online forms of content distribution fit together in the dynamic world of video consumption.”
The study finds that just over a third of South African adults are using streaming video on demand (SVOD) services, with only 16% of SVOD users subscribing to multiple services. Around 23% use per-pay-view platforms such as DSTV Box Office, while about 10% download pirated content from the Internet. Around 82% still sometimes watch content on disc-based media.
“Linear and non-linear television both play significant roles in South Africa’s video landscape, though disruption from digital players poses a growing threat to the incumbents,” says Molemo Moahloli, general manager for media research & regional business development at GfK Sub Sahara Africa. “Among most demographics, usage of paid online content is incremental to consumption of linear television, but there are signs that younger consumers are beginning to substitute SVOD for pay-television subscriptions.”
New data rules raise business trust challenges
When the General Data Protection Regulation comes into effect on May 25th, financial services firms will face a new potential threat to their on-going challenges with building strong customer relationships, writes DARREL ORSMOND, Financial Services Industry Head at SAP Africa.
The regulation – dubbed GDPR for short – is aimed at giving European citizens control back over their personal data. Any firm that creates, stores, manages or transfers personal information of an EU citizen can be held liable under the new regulation. Non-compliance is not an option: the fines are steep, with a maximum penalty of €20-million – or nearly R300-million – for transgressors.
GDPR marks a step toward improved individual rights over large corporates and states that prevents the latter from using and abusing personal information at their discretion. Considering the prevailing trust deficit – one global EY survey found that 60% of global consumers worry about hacking of bank accounts or bank cards, and 58% worry about the amount of personal and private data organisations have about them – the new regulation comes at an opportune time. But it is almost certain to cause disruption to normal business practices when implemented, and therein lies both a threat and an opportunity.
The fundamentals of trust
GDPR is set to tamper with two fundamental factors that can have a detrimental effect on the implicit trust between financial services providers and their customers: firstly, customers will suddenly be challenged to validate that what they thought companies were already doing – storing and managing their personal data in a manner that is respectful of their privacy – is actually happening. Secondly, the outbreak of stories relating to companies mistreating customer data or exposing customers due to security breaches will increase the chances that customers now seek tangible reassurance from their providers that their data is stored correctly.
The recent news of Facebook’s indiscriminate sharing of 50 million of its members’ personal data to an outside firm has not only led to public outcry but could cost the company $2-trillion in fines should the Federal Trade Commission choose to pursue the matter to its fullest extent. The matter of trust also extends beyond personal data: in EY’s 2016 Global Consumer Banking Survey, less than a third of respondents had complete trust that their banks were being transparent about fees and charges.
This is forcing companies to reconsider their role in building and maintaining trust with its customers. In any customer relationship, much is done based on implicit trust. A personal banking customer will enjoy a measure of familiarity that often provides them with some latitude – for example when applying for access to a new service or an overdraft facility – that can save them a lot of time and energy. Under GDPR and South Africa’s POPI act, this process is drastically complicated: banks may now be obliged to obtain permission to share customer data between different business units (for example because they are part of different legal entities and have not expressly received permission). A customer may now allow banks to use their personal data in risk scoring models, but prevent them from determining whether they qualify for private banking services.
What used to happen naturally within standard banking processes may be suddenly constrained by regulation, directly affecting the bank’s relationship with its customers, as well as its ability to upsell to existing customers.
The risk of compliance
Are we moving to an overly bureaucratic world where even the simplest action is subject to a string of onerous processes? Compliance officers are already embedded within every function in a typical financial services institution, as well as at management level. Often the reporting of risk processes sits outside formal line functions and end up going straight to the board. This can have a stifling effect on innovation, with potentially negative consequences for customer service.
A typical banking environment is already creaking under the weight of close to 100 acts, which makes it difficult to take the calculated risks needed to develop and launch innovative new banking products. Entire new industries could now emerge, focusing purely on the matter of compliance and associated litigation. GDPR already requires the services of Data Protection Officers, but the growing complexity of regulatory compliance could add a swathe of new job functions and disciplines. None of this points to the type of innovation that the modern titans of business are renowned for.
A three-step plan of action
So how must banks and other financial services firms respond? I would argue there are three main elements to successfully navigating the immediate impact of the new regulations:
Firstly, ensuring that the technologies you use to secure, manage and store personal data is sufficiently robust. Modern financial services providers have a wealth of customer data at their disposal, including unstructured data from non-traditional sources such as social media. The tools they use to process and safeguard this data needs to be able to withstand the threats posed by potential data breaches and malicious attacks.
Secondly, rethinking the core organisational processes governing their interactions with customers. This includes the internal measures for setting terms and conditions, how customers are informed of their intention to use their data, and how risk is assessed. A customer applying for medical insurance will disclose deeply personal information about themselves to the insurance provider: it is imperative the insurer provides reassurance that the customer’s data will be treated respectfully and with discretion and with their express permission.
Thirdly, financial services firms need to define a core set of principles for how they treat customers and what constitutes fair treatment. This should be an extension of a broader organisational focus on treating customers fairly, and can go some way to repairing the trust deficit between the financial services industry and the customers they serve.