Alon Weinberg is a Director at Dell Technologies Capital and was also formerly a Principal at Viola Ventures. This post was written during his tenure at Viola (2015-2017).

Cellwize’s solutions optimize the mobile networks of the world’s leading Mobile Network Operators (MNOs) serving over 300 million subscribers cumulatively. In my view, the company is not only solving a growing pain of managing complex and heterogeneous networks but it’s also creating new opportunities for personalized services based on subscribers’ profiles and context.

Mobile Network Operators and the challenge of traffic monetization

Nomophobia, the fear and anxiety of being without a mobile phone, is just one of the growing phenomena in our hyper-connected world in which mobile data traffic is soaring. Mobile Network Operators (MNOs) are facing staggering growth in network traffic, driven by booming mobile Over-the-Top (OTT) services such as Netflix, YouTube and Facebook. Whether MNOs will be able to monetize the traffic with value added services like the OTT players or become ‘dumb pipe’ is yet to be seen. Currently, considering the conservative view, MNOs global revenues ($1.2 trillion in 2015) is expected to grow by 3% YoY in the next 5 years while traffic is expected to grow tenfold in the same period. This means that there’s a huge need to improve network efficiency in order to sustain the EBITDA margin.

It’s therefore not surprising that cutting operational costs and lowering capex is the top priority for leading MNOs (according to A.T Kearny). At the same time, with rising user expectations, network QoS is a key factor for success. To facilitate that need, MNOs are expected to spend between $150 billion and $200 billion annually in technology (50% in network infrastructure, 10% in operational software and the rest in network and software services; according to Gartner).

In order to achieve network efficiency, cost reduction and agility there is a global trend of “software-ization” of the mobile network infrastructure. NFV (Network Function Virtualization) and SDN (Software-Defined Networking) are introducing modern principles of Cloud Services and Software Platforms respectively to the telecom world in order to achieve these goals.

What is SON (Self Organizing Networks)?

SON is synergetic to the NFV/SDN global trend and includes a set of applications that can run in the cloud and control the Radio Access Network (RAN) via standard APIs. Increasing complexity and added density of mobile networks (using multiple technologies such as 2G, 3G, 4G and small cells, multiple services such as VoLTE, Video, IoT and multiple vendors) results in complex and continuously evolving networks that are difficult to operate and optimize.

Centralized SON creates virtual networks across multiple vendors and technologies and leverages big data in order to optimize the network capacity and simplify the network provisioning. Tier 1 MNOs estimate that SON can save up to 30% of the overall network OPEX, increase data rates by 20% and reduce dropped calls by 50% (SNSTelocom report).

Why we decided to invest in Cellwize

Cellwize is a global leader of SON and has a great mix of product, team, track record and vision.

Currently Cellwize has the most comprehensive solution in the market (multi-technology support and multi-vendor support) positioning the solution for a wide variety of network deployments. It is also an independent vendor (not part of a dominant network equipment supplier) which makes it neutral to the multi-vendor optimization approach.

Cellwize’s exceptional team is led by telecom veterans with a proven track record, having demonstrated excellent execution in the past, and especially in the last few years, achieving successful deployments with multiple tier 1 operators in different regions (Europe, CIS, LATAM and APAC) and showcasing a solution with real ROI improvement KPIs.

Cellwize is also a pioneer in value-driven SON and their vision for the future is impressive. Value-driven SON uses insights and analytics not only to improve the overall network efficiency but also to enable data monetization through personalized services. This can be a key element for MNOs to drive various types of new services (like new IoT and premium VoLTE services) and enable possible collaboration with OTT players. Cellwize has already delivered initial value-driven SON solutions and the potential is vast.

The “software-ization” of mobile networks by applying the SDN/NFV principles is disrupting a very large market. SON is an immediate implementation that aligns with this trend and its benefits are clear, measurable and highly promising. We’re excited at Viola Ventures about Cellwize, not only because it has already established itself as a leader in this evolving market but also because there is still so much potential for it to become an even more substantial company in the field.