In the early days of Swedish municipal fiber networks, they adopted the only model known at that time, copying the incumbent telecom providers in building, operating and providing services on their own networks. Many of them struggled as this was something a municipality was not very well suited to do and the open access model started to gain ground. One of these municipal networks that opened their network up to multiple providers was Bostaden. But as they couldn’t find the operations platform they were looking for they decided to have it built. This was the birth of what today, ten years later, is COS Systems.
[Umea, Sweden] Municipal housing company Bostaden have been providing their tenants with Internet service over their fiber network since 1995. They are the largest property owner in the city of Umea, with half of the city’s 35 000 students living in their properties. Managing a network with mainly students is challenging, since a large portion of the subscribers will move out and new move in every semester, pretty much at the same time. In 2007 they had been struggling long enough themselves delivering the services on the network, without having reached the customer satisfaction and internal efficiency they wished for.
At this time in Sweden the Open Access model was winning ground. Many of the cities who had built their own fiber optic broadband infrastructure were in the same position as Bostaden. They didn’t have the right organization for selling Internet services and dealing with end customers and decided the best way to treat the broadband infrastructure was by layering the business model and have specialized companies being responsible for each layer. Instead of competing with the private providers by selling services themselves they decided to cooperate with them.
The first layer is the physical infrastructure, the actual fiber-optic cables in the ground. This is the layer where most Swedish municipalities focus their efforts, since infrastructure deployment and maintenance are something they are often very experienced in. Many of them also build and maintain electricity, sewer, water and gas networks. If a fiber is cut, the municipality would fix it. The second layer is the operations of the network, bringing in the electronics and lighting up the network. If a network router goes down, the Operator of the network will replace it. The operations company will also manage the relationship with the service providers. The third layer is the services layer. This is where private service providers are invited to deliver their services over the infrastructure managed by the operations company, competing to deliver the highest quality service and customer support at the best terms. If a customer has a problem with their Internet service they would turn to their service provider for help.
With this separation of the very different tasks of managing a fiber network, the entities in each layer can build a highly specialized organization to do their part of the work as efficiently as possible. With an Open Access ecosystem in place, operations companies can operate multiple networks and service providers sell services over multiple networks and thereby become even more efficient by economy of scale. This is why Sweden today has among the lowest prices for broadband in the world.
In the case with Bostaden they decided they would do the first two layers and continue to operate their own network, but they couldn’t find the system they wanted to help them embrace this new business model. With a list of requirements, they turned to local IT consultancy company UDK asking for them to build the system they envisioned. The team that would later spin-off COS Systems as a separate product company began translating the requirements into code.
The system that was developed, now called COS Business Engine, was launched an early morning in June 2008. In the middle of the night every one of the more than 10,000 customers on the network had seen their service go dark as the entire network was shut down and now they all came to the Bostaden branded Marketplace to pick their new service provider having their new service delivered the minute after. It worked flawlessly and the small operations staff at Bostaden could sit back and see orders coming in and being provisioned, hundreds every hour, on their system dashboard. Today Bostaden’s network operates under the name Bostnet, has close to 15,000 active subscribers and is managed by two people, one of them working part time.
“Taking a look in the rear-view mirror it’s pretty amazing to see what has happened since we built the first version of the system. Who could have imagined that the system would be used to operate more than a hundred networks and half a million service locations in every corner of the world. It’s also fascinating how a very high-level vision can still be relevant after such a long time. It proves it must have been pretty spot on,” comments the first two developers of the platform, Peter Sjoblom and Roger Olofsson. They both still work with the system today, Peter as the Solution Architect and Roger doing the most advanced customer support and product testing.
“There’s not much to say really, “ says Bostaden IT Director Johan Nystrom with a laugh. “For ten years now COS Business Engine has been taking care of pretty much everything involved in operating our Open Access Network. It just works.”