Telefónica made its presence felt at MWC with an update on its venture into digitalised customer relationships through AURA, and demonstrations that its virtualised core infrastructure will be ready and waiting for the deployment of the next-generation of evolving network services.

  • Hopes to prove AURA not just another digital assistant, with close customer account integration improving end-user experience and saving Telefónica costs.
  • With its cognitive intelligence approach applied to consumer interactions, Telefónica now looking to make intelligence pervasive across its infrastructure.
  • Network slicing demonstrations used to prove that UNICA infrastructure is ready for a steady evolution towards 5G services.
  • Ericsson and Huawei vying for attention as key virtualisation partners, with Netsia profile rising.

Telefónica used the opening of Mobile World Congress 2018 (MWC18) to commercially launch AURA, its cognitive intelligence-driven digital assistant that is the public centrepiece of its digital platform strategy.

José-María Álvarez-Pallete, Group Executive Chairman, who described the Congress as the “most important technological event in the world”, presented the commercialisation of the service as tangible evidence of Telefónica as a digital company, and a signpost to where a software-driven platform approach to service automation will take his business.

One year on, and AURA is out in the world

The AURA project was unveiled by Álvarez-Pallete at MWC 2017, alongside a presentation of the details of Telefónica’s four platform architecture pillars for its infrastructure and business model (Telefónicawatch, #115). The AURA digital assistant is the tip of the iceberg, where the end user comes into contact with the transformation work that has taken place below the surface.

In 2017, Telefónica said it was to create an open system that would integrate and interact with other companies’ technology and services, such as social media platforms and other ways in which users communicate with technology. Although Telefónica did not provide a timeframe for a launch of the service at its first unveiling, as last year progressed, it became clear that an early-2018 debut was on the cards.

As of February 2018, iterations of AURA had launched in six markets, with three different ways for end users to interact with the technology. Telefónica said the choice of interface was determined by the local market conditions. The choice of three different channels is also intended to act as a demonstration of the capabilities of the AURA platform, which in the future will enable prospective users to interact in their preferred manner.

  • AURA has been integrated into a mobile app in Argentina, Brazil, and the UK. While the appearance of the app has been customised to reflect local branding and language, the underlying application is universal. Through Mi Movistar, Meu Vivo Mais, and O2 Ask, respectively, customers will be able to ask questions about their accounts. In the UK, the ability to contact an advisor is noted, while in Argentina the option of ordering a prepay balance top-up is featured. Brazil’s app is principally focused on providing account information.
  • In Chile and Germany, AURA capabilities are integrated with Facebook Messenger, enabling customers to ask AURA account-based questions through the social media messaging platform. Facebook has been involved in the public presentation of AURA since the beginning, and has been a key supporter of its development, as part of its own goal of evolving services that make Messenger an environment in which users can interact with business and commercial services, as well as their social circle. For the Chilean AURA launch, integration with Facebook’s Safety Check disaster notification system was flagged, while in Germany executing top-up requests is featured as a key function.
  • Meanwhile, in Spain, AURA is integrated with the application for the Movistar+ pay-TV platform, which provides some additional functionality compared to the existing standard pay-TV app — Telefónica’s Spanish pay-TV customers will be able to control their TV platform access using the new offering, although the integration with billing and account management does not appear to feature in this iteration. In Spain, Telefónica is also preparing the launch of Movistar Home, a home video hub, similar in form to the Amazon Echo Show. The upcoming gadget, set for launch later in 2018, will have its own screen, with voice and video call capabilities, and will also manage home connectivity.

Telefónica in the game for efficiency and loyalty

The key element of the services being offered to end users by AURA is the ability to manage a Telefónica account, whether to answer queries, report faults, or request additional services.

This ability is at the core of Telefónica plans for the service, and contributes to the expectation that automated digital services will enable the Group to slash hundreds of millions of euros from its operating costs by simplifying the process and parties involved in managing customer relationships (see separate report).

Telefónica is also hoping that AURA will act as a loyalty driver. During the presentation, Mark Evans, Chief Executive of Telefónica UK, highlighted the potential for AURA to work in conjunction with the O2 Priority rewards programme to provide promotions and recommendations based on the data received through interactions with the service. Evans further suggested that the digital assistant approach to customer services is “exactly how” customers want to engage.

Álvarez-Pallete also emphasised the importance of a new customer relationship model, with AURA seemingly only the most visible element as the Group works to digitalise its relationships, building on its platform approach. Another new programme, called NOVUM, appears to be orchestrating the overall transformation. Telefónicawatch will return to this emerging initiative, and the operational and financial consequences of the wider relationship transformation effort, in future reports.

Telefónica picks up fellow travellers on data ownership drive

Álvarez-Pallete also unveiled a new Data Portability Cooperation alliance with other international operators, which he expects to support the growth in consumer trust in data-based services, and minimise the impact of personal privacy concerns on new data analytic offerings. Telefónica is joined in the new initiative by peers Deutsche Telekom, KPN, and Orange.

Telefónica regularly emphasises how important it is that customers feel, and in fact are, in control of the data created when using communications services. The focus for several years has been in positioning the telco as a trusted partner on this front, guarding the uses to which data is put — AURA is a key element of this approach, offering access, and, in the longer term, automated control. At the same time, it is also attempting to create services and solutions that enable the aggregated data it holds on customers to be put to commercial use by third parties through units such as LUCA (Telefónicawatch, #111 and passim).

To square off these two potentially contradictory goals, Telefónica is putting control of data in end-user hands, but then asking if it can have it back. As well as stressing the aggregated and anonymised nature of the way the entrusted data is then put to use, Telefónica is committed to enabling end users to withdraw all consent for the use of their data, and, should they choose to switch provider, to take that data with them, potentially to be integrated into another operator’s systems (Telefónicawatch, #121).

Here, the new alliance comes into play. Although details are scarce, it appears the initiative will consider how data portability for end users can be implemented, and it is hoped that other operators will join the programme over the course of 2018. In the longer term, the telco is hoping the work will form the foundations of a global data portability ecosystem.

MWC 2019: Network know thyself

In closing his AURA presentation, Álvarez-Pallete set an appointment for MWC 2019 when Telefónica will showcase progress in development of intelligent networks. The telco expects to be able to show progress in the creation of a “self-configured, self-provisioned, self-enhanced, and self-managed network” that will become the basis for future 5G services.

How this progress will manifest is unclear at this stage, but the Executive Chairman said the development is the next logical step in the infrastructure overhaul that has been heralded by Telefónica since MWC 2014 (Telefónicawatch, #85). Álvarez-Pallete said Telefónica had moved from increased automation towards software-defined networks through the UNICA programme, added to the potential of big data and machine learning to overhaul customer experience, and will now apply its faith in cognitive intelligence technology to its entire network infrastructure.

The Telefónica goal is to enable customers to “run the network as if it was yours” through the creation of enhanced self-organising intelligent systems. Development is underway, and glimpses of the research and proposed infrastructure may appear over the coming months, but more concrete information, and examination of potential use-cases, will likely have to wait until next year’s event in Barcelona.

Telefónica brings along its friends

Telefónica hosted several partners at the AURA launch, alongside senior executives from across its business.

On the Telefónica side, the high-profile duo of Álvarez-Pallete and Chief Data Officer Chema Alonso were joined by Telefónica UK Chief Executive Mark Evans, and Christian Gebara, Chief Operating Officer for Telefónica Brasil.

Also contributing to the presentation were representatives of key partners in the development of the technology:

  • Javier Oliván, Vice-President for Growth, Facebook.
  • Scott Huffman, Vice-President for Engineering, Google Assistant.
  • Gupreet Singh Pall, Vice-President for Global Products, Bing & Cortana, Microsoft.

More partners to come

While Facebook was the first external partner to integrate AURA, it is set to be followed soon by other major players in the digital assistant and artificial intelligence (AI) field.

The Telefónica interface is reportedly on its way to Google Assistant in 2018, and Microsoft’s Cortana next year. Microsoft is also an early partner in the project, with much of the technology developed by the telco based on Microsoft’s AI capabilities.

Amazon’s Alexa, which was referenced as a platform upon which AURA could be integrated at the last MWC (Telefónicawatch, #115), did not get a mention at the most recent event.

Comment: wannabe killer app rounded up with usual suspects

Despite the achievements associated with the AURA launch Telefónicawatch, perhaps churlishly, considers the launch to have been something of a damp squib. The presentation and surrounding hoopla featured sporting celebrity endorsements, visual effects, cheerful props, and partners declaring their pleasure at having worked with the telco on the project, but failed to convince on the real-world appeal of the product.

The capabilities of digital assistants are hardly news these days, particularly in front of a technology industry audience, and AURA‘s ability to update users on their mobile data allowance, or change the channel on their televisions, is not revolutionary. These capabilities were, however, repeatedly demonstrated to prove the versatility of the service in different environments, even though the point was already pretty clear.

Nonetheless, there remains significant potential for the offering in an incremental, evolutionary sense. This potential will, however, be dependent on customers fully engaging with the technology and, in time, adapting the way in which they manage their relationship with Telefónica as a service provider.

While the work behind AURA, and the transformation of Telefónica into a digitally focused and powered business, is impressive, the operational benefits remain to be proven.

Image: Telefónica.

Table of Contents

EXECUTIVE BRIEF

GROUP

Management update

FY17: Álvarez-Pallete a man on a mission [p6]

  • Table 1: Telefónica, selected financial data, FY17
  • Opex savings at the heart of digital change
  • Vilá in the field, Abasolo deals in the nitty-gritty

Countries: Europe slow and steady, LatAm picks up pace [p8]

  • Table 2: Telefónica Group, performance by unit, FY17
  • Table 3: Telefónica Hispanoamérica, performance by country, FY17
  • Table 4: Telefónica Group performance against guidance for 2017

Guidance: revenue goal smashed, but caution remains [p11]

  • Telefónica brings along its friends
  • More partners to come

MWC

AURA promising the future, UNICA delivering it [p12]

  • Comment: wannabe killer app rounded up with usual suspects
  • One year on, and AURA is out in the world
  • Telefónica in the game for efficiency and loyalty
  • Telefónica picks up fellow travellers on data ownership drive
  • MWC 2019: Network know thyself

Network slicing presented as latest UNICA breakthrough [p17]

  • Telefónica illustrates the diverse capabilities of a single future network
  • UNICA head in the clouds
  • New Huawei MoU on E2E
  • Table 5: People movement highlights
  • Figure 1: 5G Momentum Index: Telefónica global ecosystem, to February 2018

GLOBAL RESOURCES

5G

Telefónica and Huawei flag 5G-V2X tests for autonomous driving [p21]

  • Pitting 5G vendor against 5G vendor
  • Growing focus on 5G for connected and autonomous cars
  • Telefónica racing Vodafone on V2X progress

O2 promises 5G test bed at the O2 [p23]

  • TIWS heralds virtualisation hubs across global infrastructure

Nokia bolsters Telefónica links with German partnership [p24]

DIGITAL SERVICES

ElevenPaths

ElevenPaths and McAfee partner to secure home routers [p26]

Weve

Weve launches location verification service [p27]

Alliances

Telefónica partners UN’s FAO on agri-commerce [p29]

  • Forecasts and softer skills also to be fostered
  • New notifications solution launched for developers
  • Telefónica backs blockchain research group

LATIN AMERICA

Regional

Huawei brings 4.5G+ to Latin America [p32]

  • 4.5G Evolution promises immediate and longer term benefits
  • Tech City collaboration crosses continents
  • Germany (and China) 1, Spain (and Finland) 0

Telefónica brings content to LatAm OTT play [p33]

  • A potential audience of multiple millions…
  • Viacom and RTVE content to support Telefónica’s bundle strategy
  • Meanwhile, Netflix set to land on Movistar+ in Spain

Brazil

Probe launched into Telefónica’s fine swap agreement [p35]

Colombia

Government’s Coltel exit edges forward [p37]

  • Telefónica takes Colombia to World Bank arbitration
  • Messenger among latest zero-rated apps as AURA reaches Chile

Mexico

Telefónica considers fixed broadband options for Mexico [p38]

  • Opportunity for Telefónica to expand in growing market

EUROPE

Germany

Telefónica teams with Vodafone for fibre backhaul [p41]

  • Serving 5G and the greater good
  • Vodafone picks up short-dated spectrum as part of deal

Mobile Connect to see German launch [p42]

Spain

Orange commits to Telefónica fibre spend [p43]

United Kingdom

Giffgaff to offer loans and financial management app [p44]

O2 to offer digital ID authentication against cyber-threats [p45]

FURTHER READING

INDEX

Index

Symbols

3GPP 23
5G Automotive Association 22
21st Century Fox
– Sky plc 19, 34, 39

A

Advanced 5G Network Infrastructure for Future Internet Public-Private Partnership (5G PPP) 23
AI 12, 30
Allianz SE 42
Alphabet
– Google 12
– – Android 30
Altán Redes 39
Amazon 12, 14
América Móvil 37, 39
– Claro 35
– Telcel 39
– Telmex Internacional (Carso Global Telecom SAB)
– – Teléfonos de México (Telmex) 39
Anatel 35, 36
Anschutz Entertainment Group (AEG) 23
Apple 38
– iOS 30
Asus 43
AT&T 22, 39, 43
– DirecTV 39
Audi 22
Axtel 39

B

Bank of America Corp. 37
BMW 22
BNP Paribas 37

C

CaixaBank 19
Carrier Blockchain Study Group 30
China Mobile 18, 43
China Telecom 43
Cisco Systems, Inc 22
CityFibre 9
Competition and Markets Authority (UK) 44
Correos 44

D

Daimler 22, 42
Deutsche Bank 42
Deutsche Telekom 15, 18, 22, 42, 43
– T-Mobile 43

E

Ericsson 12, 15, 17, 22, 30, 42
– 5G-ConnectedMobility 22
Erste Bank 19
Etisalat 30
European Union
– European Commission 19, 22

F

Facebook 12, 13, 14, 38
– OpenCellular 14
– Telecom Infra Project 14
– WhatsApp 38
Far EasTone 30
Ficosa 15

G

Grupo Clarín 36
Grupo Santander
– Santander 19
GSM Association
– GSMA
– – Mobile Connect 42
GSM Association (GSMA) 42
– Mobile World Congress 6, 12, 42

H

HAND Enterprise Solutions 21
HBO 34
Hewlett Packard Enterprise 43
Huawei 12, 17, 18, 21, 22, 23, 32, 33
– Joint Innovation Lab 21

I

IFT (Mexico) 39
Intel 22, 26
ItsOn Inc 39

J

Juniper Networks 22

K

KT Corporation 30

L

La Liga 8
Lenovo 43
LG 30
LinkedIn 19

M

McAfee 26
Megacable 39
Microsoft 12, 18, 43
MTV 34
MVNOs 44

N

Netflix 33, 34
Netsia 12, 17
Nokia 22, 23, 24, 33, 47
NTT 22

O

O2 Arena 23
Oi SA 35
Omnicom Group, Inc
– Organic 6
Orange 8, 15, 18, 43
Origen Technologies 21

P

Parallel Wireless 14
Payfone 45
PLDT 30

Q

Qualcomm 22, 43

R

RateSetter 44
Regions
– APAC
– – Australia 43
– – China 18, 21, 22, 33, 43
– – Hong Kong 24
– EMEA
– – Europe 6, 7, 8, 19, 22, 26, 33, 40, 44, 45
– – Finland 33
– – France 43
– – Germany 8, 9, 13, 23, 24, 33, 41, 42, 43
– – Ireland 43
– – Spain 6, 8, 9, 14, 19, 22, 24, 26, 27, 29, 30, 33, 34, 36, 42, 43, 44, 45
– – Switzerland 43
– – UK 8, 9, 13, 19, 23, 24, 27, 34, 42, 44, 45
– Latin America 6, 7, 9, 14, 21, 26, 31, 32, 33, 34, 37, 38
– – Argentina 10, 13, 21, 33, 36, 42
– – Brazil 9, 13, 19, 21, 22, 24, 32, 33, 35, 36, 38, 42
– – Central America 29
– – Chile 10, 13, 21, 29, 33, 38, 42
– – Colombia 10, 29, 32, 33, 37, 42
– – Costa Rica 33
– – Ecuador 33, 42
– – El Salvador 29, 33
– – Guatemala 29, 33
– – Mexico 10, 21, 24, 32, 33, 38, 39, 42
– – Nicaragua 29, 33
– – Panama 33
– – Peru 10, 21, 33, 42
– – Uruguay 33, 42
– – Venezuela 11, 19
– North America
– – USA 21, 24, 43, 45
Repsol 19
Royal KPN 15
RTVE 34

S

Samsung 18, 22
SAP 21
SIAE Microelettronica 22
SK Telecom 22
Softbank
– Sprint 30, 43
SoftBank 30
Spotify 38
Sprint Nextel 30, 43
Starbucks 39
Swisscom 43
Swrve 30

T

TBCASoft 30
Technologies
– 2.5G 39
– 3G 39, 42
– – 3.5G 41
– 4G
– – LTE 9, 14, 17, 23, 24, 32, 33, 36, 38, 39, 41, 42, 43
– 5G 9, 12, 15, 17, 18, 21, 22, 23, 24, 32, 33, 41, 47
– Broadband 9, 26, 36, 38, 39
– eSIM 43
– Ethernet 45
– FTTH 36
– GPS 27
– GSM 42
– high definition (HD) 34, 42
– IP 42
– IPTV 9, 33
– LPWA 15, 29
– LTE-A Pro 24, 32, 33
– M2M 32
– MIMO 22, 24, 32
– NB-IoT 29
– OpenStack 21
– R&D 18
– SIM 14, 42, 45
– SMS 45
– TV 9, 14, 34, 36
– UMTS 42
– V2X 21, 23
– VoLTE 42
– VoWi-Fi 42
– Web Services 14
– WLAN
– – Wi-Fi 42, 45
Telecom Argentina 36
Telecom Italia 19, 43
– Telecom Italia Mobile 19, 35
– TIM Brasil 19
Telefónica Group 6, 9, 11, 19, 21, 22, 23, 26, 29, 30, 33
– Associates and investments
– – Telecom Italia 19, 43
– Digital services
– – AURA 7, 12, 13, 14, 15, 38
– – Axonix 27
– – ElevenPaths 14, 26
– – Go Ignite 18
– – Innovación Alpha 27
– – LUCA 15, 19
– – M2M 32
– – Open Future 18, 26, 27
– – OTT 33, 34, 39
– – Statiq 27
– – Talentum 30
– – Telefónica I+D 27, 29, 34
– – Wayra 29
– – Weve 27
– Directors
– – Guad Solé, Jordi 19
– Europe
– – E-Plus 8
– – Germany 26, 42, 47
– – giffgaff 19, 44
– – Giffgaff 44
– – O2 6, 9, 13, 14, 19, 23, 26, 27, 42, 44, 45
– – Spain 22, 26, 33, 43, 44, 45
– – Telefónica Deutschland 8, 24, 32, 33, 41, 42
– – UK 6, 9, 12, 14, 19, 23, 27, 44, 45
– Executives
Abasolo, Laura 7
– – Alierta, César 7
– – Alonso, Chema 12
– – Álvarez-Pallete Lopez, José María 6, 7, 9, 10, 12, 13, 14, 15, 17
– – Barclay, Danny 45
– – Blanco, Enrique 17, 21
– – Casas, Jose Luis 19
– – Caton, David 19
– – Corral, Domingo 33
– – Evans, Mark 12, 14
– – García, Juan Carlos 32
– – Gebara, Christian 12
– – Haas, Markus 41
– – Laurita, Daniela 19
– – Pérez, Pedro Pablo 26
– – Rodríguez Zarco, José Luis 19
– – Sadler, Julie 19
– – Sinclair, Tom 19
– – Vilá, Ángel 7
– Ex-executives
– – Escrig, Miguel 19
– – Gentil, Bruno 19
– Global Resources
– – Telefónica Business Solutions 42
– – Telefónica International Wholesale Services 24
– – Telxius 22
– – UNICA 12, 15, 17, 18
– Latin America 34
– – Brazil 9, 12, 19, 22, 35, 36, 38
– – Chile 29, 38
– – Colombia 37
– – Mexico 38, 39
– – Vivo 13, 22
– Movistar+ 14, 18, 33, 34
– Products and services
– – Movistar+ 14, 18, 33, 34
– – Movistar Play 33, 34
– – Movistar Series 33, 34
– – netzclub 42
– – O2 Priority 14
– – pay-TV 8, 9, 14, 33, 34, 36
– Telefónica Educación Digital 27
Televisa 39
Telstra 43
Twitter 38

U

United Nations 29
– Food and Agriculture Organization 29

V

Verimi 42
Verizon Communications 43
Viacom 33, 34
Vodafone Group 8, 9, 22, 23, 41, 42, 43, 44
– Germany 41, 42
– Spain 43, 44
– UK 9
Volkswagen Group 18, 22
– SEAT 15

W

World Bank 37
– ICSID 37
– International Center for the Settlement of Investment Disputes (ICSID) 37
– International Centre for Settlement of Investment Disputes 37

Z

ZTE 22

About

About Telefónicawatch

Report: #124
Published: February 2018
Next report: March 2018
For more information visit: Telefónicawatch