XO Communications tracks every transaction (text message, e-mail, etc.) made by its customers, which are mostly small and medium businesses. Nonetheless, as the industry has skyrocketed in complexity, the carrier found itself in a long-distance profitability crisis borne out of legacy data analytic software that made it impossible to keep up with rate changes.
“The telecom business is very data intensive,” said Rob Geller, CIO at XO. “We are one of the industries that tracks things at a very finite level; we track every call, every data session. It’s akin to a hardware store tracking every nail.” XO adds about 2.5 billion CDRs per month to the storage facility, as an example.
The biggest issue was the 80-terabyte data warehouse — or rather, the traditional technology for analysis and reporting that XO was using to tap the information stored there. The LEC was using that information to make big decisions about operational processes, but there was a gap between the analytical reporting it was getting and the ability to determine the profitability of various call types. That’s because a single report query would run for eight or 12 hours.
The inability to appropriately perform an analysis of profitability for calls and routes brought XO to “kind of a crisis around May of last year,” said Gellar. To wit, the long-distance business went from being profitable to "losing a couple million a month."
XO realized that it needed to analyze and uncover the problem, market by market. The carrier needed to figure out how to get the visibility to route calls differently or change pricing as needed. And that was a need that was a bit more critical given XO’s place in the market.
And, unlike the AT&Ts of the world, XO still pays 40 cents per dollar for last-mile access. “We’re an interesting business,” Geller continued. “We’ve transformed in a couple of ways over the last two or three years, going from relying on a traditional voice business to carrying 95 percent VoIP and data. But we need to sell it correctly and route it correctly and then feed those records back into the system so we have an intelligent operational process.”
XO realized that a modern data analytics system was absolutely critical to meeting the challenges it was facing.
“A number of technologies out there are orders of magnitude better at processing large amounts of data,” said Geller. “We looked at a number of companies to see how easy to use or install, and settled on a box from Netezza.”
The 50-terabyte box was installed and up and running in the space of about a month — something that would take three, four or five months to do for traditional software. The carrier was able to achieve a positive $2 million per month in profit about a month and a half after the system went live.
Modernization is driving carriers to continually invest in OSS and back office systems in order to just keep up, not to mention stay ahead. Geller noted that XO is looking at its data analytics system to analyze a number of new aspects of the business.
“We’re now looking at other things that we didn’t think could be done before,” he said. “Profitability across a number of specs, sure. But we’re also using it for network capacity planning, and starting to produce a whole series of reports showing where we can consolidate resources, focus on optimization of the network itself and how we manage the network.”
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