It was once considered foolhardy for telecommunications startups to focus on the core of the service provider network, but times have changed as Blueslice, a five-year-old company, said Wednesday it is using core technology to build a business around mobile services resellers.
Blueslice CEO Stephan Ouaknine detailed how his Montreal-based company markets technology that gives MVNOs, or resellers of mobile services, the ability to take firm marketing control of their major asset: their subscribers.
To do this, Mr. Ouaknine said MVNOs need home location registers (HLRs), an active database that manages subscriber information. The technology authenticates subscribers as they enter the network, checks the subscriber’s billing status, and determines whether the subscriber is in his or her home area or is roaming.
HLRs, a crucial part of a service provider’s network core, are generally developed by traditional telecommunications suppliers such as Lucent, Nokia, and Ericsson, and sold to large service providers.
They are usually proprietary systems under the exclusive control of the service provider, rather than the MVNO.
Taking Control
Blueslice sells open HLRs to MVNOs so the MVNOs can take control of their customers, rather than leave them in the custody of the service provider’s customer care system.
“It’s a simple business idea that if you are going to spend all that money acquiring mobile subscribers, does it make sense that the MVNO is going to hand over the subscriber to the service operator?” Mr. Ouaknine asked.
“The MVNOs should own their subscribers, and they can do that by purchasing HLRs,” he added.
The MVNO can purchase an HLR, a switch, and a billing system, and take control of the customer from the service provider.
“They can have enough control to execute on their business plans,” said Mr. Ouaknine. “And they can have it for a small fraction of what it would normally cost for that kind of technology.”
MVNO Market
The MVNO market has been growing rapidly as cable operators in the United States have joined the fray. MVNOs represent 160 million subscribers globally, or approximately 9 percent of the total mobile market.
By using a Blueslice HLR, the MVNO can spoof the service provider network to reduce the roaming charges for its subscribers. It can do this by essentially disconnecting the hard link between the SIM (subscriber identity module) card and the phone number.
The system informs the network that someone from New York traveling in Paris has a Paris number, and as a result should not be charged for roaming.
“Our system is doing in a more elegant way what sophisticated travelers have been doing for a long time; that is, swapping out SIM cards as they travel from country to country,” said Mr. Ouaknine.
Blueslice will either sell HLRs outright or offer the technology as a service.
Before founding Blueslice, Mr. Ouaknine was founder and chief executive of Airslide Systems, a mobile signaling systems supplier.
Airslide raised over $42 million in capital, achieving a total company value of $185 million from VCs such as Sequoia Capital, Soros Private Equity Partners, Anschutz Investments, Intel Capital, Cisco Systems, CDB Webtech, SingTel Mobile, KPN Qwest, and others.
Blueslice has also received undisclosed investments from the founders of Eicon and other companies in Canada.
Contact the writer:CMedford@RedHerring.com