Telcos look to solutions provision by mixing connectivity, inventory tracking

The selection of Bell Canada to deploy a wireless technology pilot for the Supply Network Chain (SNC) Project is another example of the ongoing evolution of Canadian telcos into more than just network providers. Allstream Inc. similarly announced the expansion if its RFID solution portfolio last month, further indicating the importance of this growing technology as a new revenue stream. As this sector expands and new markets are targeted the telcos will be able to leverage their networks and existing communications agreements to contend with a variety of competitors. Those that prove successful in this industry will be able to use the all-encompassing scope of RFID to increase their recognition among consumers. With the SNC Project, Bell will be implementing the very first end-to-end Electronic-Product-Code/RFID pilot in Canada. The pallet, case and item-level tagging project will involve up to four suppliers, one warehouse and one Staples Business Depot location, and will be a critical step in determining the feasibility of RFID. "This pilot will allow us to assess the full financial implications both from a capital cost as well as potential labour savings and, ultimately, customer benefit," Joe Soares, director retail processes for Staples Business Depot, tells Report on Wireless. "Together with our SNC partners, we will discover what the true life implications of RFID are." Implementing this test run allows Bell to show its commitment to this new area, and helps establish its position in the RFID market. "Our participation in the SNC project is an example of how Bell is moving forward at expanding its solutions," says Mohammed Nakooda, a Bell spokesperson. "Wireless data presents a strong growth opportunity to Bell, and this includes RFID. RFID is a hot, emerging technology." It’s this relative infancy that increases the need for testing options. One of the three offerings in Allstream’s RFID solutions portfolio includes a "discovery tool kit" that enables customers to test the validity of the technology before implementing it. Senior product manager Dave Barkwell says the testing phase, and the company’s involvement in it, is critical. "RFID isn’t going to work for everyone," he says, "so we designed a full package for customers to test it. We include all the pieces of the puzzle, the hardware and software that could each be supplied by multiple vendors. Customers are seeing the hype , but they need to be able to get into it to see if it works for them."Barkwell also says RFID represents a very important market for Allstream, and that it was a natural move because it ties in to so many parts of the company. "It leverages our data centres as part of our managed services, and uses our network, which falls under connectivity." Allstream’s trio of RFID solutions – RFID Go!, RFID Comply, and RFID Custom Solutions – are further proof of the firm’s commitment to this sector. While Bell would not comment directly on the importance of RFID as a new revenue stream, it did say that deploying wireless data solutions represents a shift in company philosophy. "Bell Canada Enterprises is entering a new model in the way in which we provide services and solutions," says Nakooda. "We’re changing the way we operate from a business-to-business perspective. We’re no longer just a network provider, now we’re a solutions provider. Two years ago you wouldn’t have seen Bell and RFID mentioned in the same sentence." Iain Grant, an analyst for the SeaBoard Group, says RFID was an obvious and necessary option for the telcos: "They have to evolve. When the products that drove their revenues over the past century are all free, well, they have to sell something else. They see RFID as a major new service where their skills can be brought to bear, and where their networks can be exploited to add value to enterprise customers." The customers who make up the market for this technology are surprisingly diverse. Retailers like Staples, along with their suppliers and transport companies, are obvious targets. Allstream also identifies the government and healthcare industries as potential benefactors of RFID. But perhaps most promisingly, Grant says there is no traditional market for this technology, and it could penetrate almost any area of commerce – hospitals, libraries and pizza delivery to name a few. For the telcos, RFID could help couple them tighter with many of their existing customers, as long as its deployment proves practical. "There is a substantial benefit in knowing where your product is at any given time," says Soares. "Naturally, we will proceed if it makes financial sense to our business. There is a substantial hardware investment involved as well as the ongoing price of tags, which continues to drop. We are still at an exploratory stage." If and when there is significant market demand, Bell and Allstream won’t just be competing with other telephone companies – TELUS Corp. is looking to get involved as well – as the list of providers could be just as varied as the list of customers. "Right across the board you are going to see a lot of entries," says Nakooda. "Competition will come from systems integrators as well as other telecom companies." HP, Deloitte and IBM are among the more prominent names that will compete in the sector. The latter has already released national television ads touting its RFID solutions, which should both bring attention to the company and to the industry itself. It will be interesting to see how prevalent this type of advertising will be, and how aware the general consumer becomes about the unseen benefits of RFID; although they don’t purchase it directly, it is employed on their behalf." "We must think of how this will benefit the consumer," says Soares. "If there is no benefit to them, then why do it?" Essentially, the goal of RFID is to increase productivity and decrease hassle for all those who use it, including retail consumers. Soares continues: "For example, if we reduce the amount of times we handle product before putting it on our shelves, it may reduce out-of-stocks. We know customers get disappointed when happen." Barkwell says one of the more noticeable benefits to end users is that the information contained in EPC codes will make it easier to return purchased items, especially if you’ve lost the receipt. But will the consumers necessarily understand why this process is easier, or perhaps more importantly, that a telephone company helped the transaction? "We are working with retailers and we need to make sure the end users understand," Barkwell adds. "There will be some messaging to the customer."

Telcos look to solutions provision by mixing connectivity, inventory tracking

News | 11/01/2005 5:00 am EST

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