Some may call it ‘the driest subject in telecoms’
We know it isn’t IoT or eSIMs, but hear us out. It’s one of the most important topics across the entire sector and shouldn’t be dismissed like that. Rather, it must be understood in full to avoid any unnecessary penalties, particularly ones impacting finances and reputation.
Yes, it’s a ‘highly complex subject’ that requires well-informed legal advice. You may feel inclined to roll your eyes and continue doomscrolling through your Instagram feed. But for any business looking to expand globally, numbers and regulatory changes can’t be diminished in their importance.
Gamma’s Business Director for Service Providers Mike Mills was joined by Group Commercial Director Dave Williams to discuss this nuanced, important subject. Through expert knowledge and that mindset to keep customers protected, businesses can extend their global reach without the fear of repercussions.
Doing it properly
Dave admits that both he and Mike have ‘spent many hours in an evening kicking this around’. Those conversations have created an outline on how Gamma can navigate these regulations in a proper manner. Having that kind of guidance is crucial to keeping customers protected.
The two key points are the end customer’s expectations and the risk appetite of the business. Gamma’s own risk appetite is very low, and nobody wants to write ‘bad business’ on both a personal and business level. Writing bad business abroad won’t just result in regulatory issues in those locations; in the UK, it’ll have a negative impact on reputation and ‘the loss of service to critical customers in [Gamma’s] core geography.’
Gamma’s own strong Channel base in the UK means nobody wants to be taking a risk like that.
Mike notes how there are an increasing number of incidents where businesses are losing their international numbers. ‘Doing it properly’, as Dave mentions, accumulates costs, including maintaining that foreign presence and having a number range that interconnects with every domestic Tier one supplier. There’s an extra level to that as well, with ‘trusted interconnects with key suppliers’ and requirements around emergency calling and number porting also being factors to consider.
Again, these businesses need to have an ‘appreciation of the consequences.’ For Dave, this goes beyond regulation – it includes tax and ‘compliance outside… our area of expertise.’ To do things properly, those competencies need to be considered, and local expert knowledge needs to be fully leveraged.
Businesses are perfectly capable of heading out to a certain geography, establishing a partnership and commencing traffic routing. While it is difficult to stick one’s neck on the line reputationally and say, ‘we stand behind this as a service’, trust is paramount. For Dave, ‘that’s where I want to be’.
A challenging landscape
Approximately 47% of calls are reported to be scams. There’s no surprise then that, in the cloud communications market, there’s increased global regulation and a more ‘heavy-handed’ approach from operators and networks. It’s hard for the market itself to navigate, especially for providers who’ve got a need for global communication enablement.
Mike stresses just how important the ‘human cultural element’ is. Each territory has a different cultural fit, and if confidence in the supply chain is lacking, then those organisations ‘don’t have the right relationships.’ It’s important for those businesses to work with a partner that takes time in finding the right relationships and advice to put ‘the right sort of robustness under the hood.’
Governments are increasing the pressure on regulators to cut down on nuisance and spam calls. In the UK, for example, banks must pay compensation for ‘authorised push payments’ i.e. when someone authorises a payment after being scammed. It’s an industry-wide endeavour to reduce fraud and risk to customers.
Then there’s spoofing and the loophole of being ‘a legitimate way of doing business.’ While some legitimately spoof their numbers from a call centre, there are those ‘maliciously pretending to be someone they’re not.’ In the background, Gamma is working hard to block those calls from abroad that are presenting themselves with a UK number.
In some cases, it makes sub-allocation much more difficult. It’s common in the UK for numbers to be allocated from a business to a reseller and beyond, whereas in France sub-allocation has been prohibited since January 2023. For providers that specialise in cloud-based communications, it adds an extra layer of complexity.
Being a regulated and open provider
Providing those global services means being compliant with the needs and wants in each territory. ‘Know your customer’ checks are a regular occurrence in the UK, while countries like Germany seek clear evidence that a business in located in that region. In certain territories, ‘there’s an increased amount of diligence needed.’
Navigating these regulations is something that an experienced and trusted provider can easily manage. Interconnects with multiple strategic partners brings with it a strong relationship built on trust and honesty. If something goes wrong (or when, let’s be honest), then there needs to be ‘open, honest, frequent communication.’
From Gamma’s own perspective, the acquisition of Coolwave has greatly improved that global reach. Those capabilities form the core of Gamma’s own release of our Global Communications Enablement portfolio.
With a strong core of engineers and a deeper knowledge on compliance, points of presence (PoPs) and licenses, there’s so much more that can now be done. Whether it’s sub-allocation or working with suppliers to keep emergency services operational, Gamma’s own offering is in a great position.
Fronted by that ‘tri-party’ of Coolwave, a partner and the end customer, there’s a ‘high level of certainty’ that all regulatory needs are being met. As Mike rightly points out, it’s a ‘horrifically complicated world’ that needs the critical human element. The human touch needs to be infused with a company’s DNA and act as the ‘secret sauce’ for greater things to come.
Those providers must also maintain a supply chain that’s robust and always operational. ‘An issue affecting ten users in Estonia on Saturday [could] impact the entire UK business’, as Dave hypothesises. A suboptimal supply chain can have a severe knock-on impact across the entire business.
If Mike could give people one bit of advice, it’s to maintain a supply chain with ‘a whole lot of quality providers underneath it.’
The geopolitical landscape
We’re not going to poke the bear and talk about tariffs. Mike’s own comment about ‘France being problematic’ isn’t supposed to be invoking the spirit of Nelson at Trafalgar either. The complicated, ever-changing geopolitical landscape is making the telecommunications industry rethink their approach.
It’s not malicious to say that regulators in domestic markets are ‘becoming a bit more insular.’ They want to keep control of their interests, including number stocks, and support ‘localisation and supply’ alongside domestic Tier one providers. Dave makes the point that they’re likely talking to those domestic entities more than the global cloud providers.
There’s certainly a global effort to reduce ‘bad traffic’. In 2023, an estimated $38.95 billion was lost due to telecommunications fraud; that steadily rising number is likely down to getting ‘so much more trust over the phone’ when speaking to someone.
In theory, the knock-on effect from having more hoops to jump through can be the stifling of innovation. Mike takes the ‘devil advocate’s view’ that providers can be innovative under the regulation guardrails. Telecommunications is a highly regulated market that has been able to maintain certainty, robustness and scale, but innovation can still happen on the software level.
There’s a gap for a provider to be technically capable and risk conservative, while being innovative and operating at scale. It’s certainly something that Gamma is focusing on right now.
Staying in our lanes and the changing of the guard
There’s an increased awareness of what ‘doing it right’ means in each country. These ‘hyperscalers’ with global software ambitions may not match that ambition to telephony. If a telco company can do what they’re good at, then a software company have free reign to do what they’re good at.
That mindset of ‘you stay in your lane, we stay in ours’ is, in Mike’s opinion, ‘how we win in the market.’ It’s why products like Operator Connect have been a popular choice for a good number of years.
International direct dialling (IDD) was always the traditional method of delivering an international call. If a business using a cloud platform based in Germany wanted to make a call to Japan, then IDD and a change to the presentation number would make that possible. Nowadays, businesses must ‘actual land it’ much close to that destination and provide it locally.
Inputting those calls from the cloud in a way that end users expect does cause a ‘huge amount of grief and headache and thought.’ When that German employee wants to speak to a Japanese colleague, that call ‘just needs to work.’ Mike is correct in the sense that service providers can ‘seize on that changing of the old guard into the new world.’
Dave emphasises that point by saying the days of hyperscalers going into a territory, saying ‘I’ll deploy here and everyone can use it’, are now behind us. Compartmentalising bits of each solution and providing those chunks to trusted parties is ‘where we win.’
‘We’ve covered quite a lot in this session’
Mike has hit the nail on the head there. What some call ‘the driest subject in telecoms’ is one critical to the global ambitions of many companies. Working with those local regulatory frameworks, plus those leading local providers, means that ‘the best people [make] the decisions on behalf of you.’
Gamma is a safe pair of hands in that regard. A leading provider has to ‘give you that comfort in your business’, and Gamma is doing this on a global scale. The market is getting more challenging – businesses need to work with a service provider that ‘does it properly [and] understands the human value.’
The road map, as Dave mentions, is driven as much by opportunity than strategy. Then again, it would be great to ‘[paint] the world purple’…
DISCLAIMER: All viewpoints expressed in this blog and accompanying podcast are the viewpoints of Gamma, and shouldn’t be taken as professional legal advice.