Dan Dooley, President and General Manager, TNS Telecommunications Division
After serving over 14 years at Sprint (NYSE: S), a tenure that most recently included a stint as president of its wholesale division, Dan Dooley decided to make a change and take on a new position as president and general manager of the telecommunications division of Transaction Network Services (NYSE: TNS). At TNS for almost a year, Dooley's main drive is to combine its growing telecom business with its legacy financial payment verification business. This drive will deliver new verifiable information for financial institutions like American Express beyond just phone numbers. Wireline and wireless service provider will also be able to provide new services that will allow users to personalize their caller identity. Sean Buckley, Senior Editor, FierceTelecom recently caught up with Dooley to talk about his activities at TNS.
FierceTelecom: Okay, Dan you're a year into the job at TNS following a long career at Sprint. To start, can you talk about the first year on the job and the transition from Sprint to TNS?
Dan Dooley: As much as I loved running wholesale at Sprint, I jumped at the chance to run a smaller company. TNS is about a $500 million company. It's a nice change and being back in the Washington, D.C. area is where I want to be. I really like the size of it and for me personally it's still in the telecom space providing a really needed service. One of the hallmark solutions that TNS provides is the e-Identity solution, which includes everything from a caller's name to verifying and displaying information. I thought the data management exchange piece of it was really cool. Trying to build something from the legacy heritage is exciting.
FT: You mentioned the legacy heritage of TNS. How are you helping TNS advance forward?
DD: When TNS was born circa 1990 it was really a payment financial company. We do $150 million per year of virtual transactions whether it's Western Union, United, Bank of America or AMEX; that's how the company was really built. We connected over 3 million point of sale terminals and we do 15 billion transactions a year. The company went on a telecom buying rampage, including VeriSign's (signaling) assets to get scale and it turns out that now 50 percent of the company is telecom. That's when they called me and asked if I would come here and take the predominantly legacy business and (see) what can I make out of it. What's nice about being in the legacy business is that we have relationships with every carrier in the world. We're in the middle of all of these data exchanges so have a lot of authoritative information to be that one-to-many connection for them.
What we're doing is marrying our relationships with the carriers with the payment vertical. Fraud is rampant in the payment industry. It's probably about a $350 million problem per year for just the verification industry, but it's probably a $2.5 billion problem in the payment space. What they're looking for are better ways to verify who you are. As more transactions become virtual, who are you when you put in Dan Dooley and I live in Vienna, Va. and I want to transfer $100 to Sean? They are looking for ways to verify that information. About half of the time they look at the telephone number as that verifiable source. We have that verifiable source. We've been aggressively connecting those areas together. We'll go to Western Union and they'll dip us first and ask is this really Dan? Is this his number? We don't give them the information but rather give them a score that it's 90 percent or 70 percent accurate and they either let the transaction go through or do a secondary screening. We're really becoming that verification component with the authoritative data from the carriers. What that gives the carriers is another revenue source. We revenue share with them and we go after the payment and transaction industries to reduce fraud.
FT: What carriers do you have established partnerships with today?
DD: We host Sprint, Verizon (NYSE: VZ), and T-Mobile's information. Today, we have the information to display the name. We also take that data to our payment vertical, which we had for 20 years and we're an established provider to the payment industry. They trust our score and they pay us for that and then we split the payment with the carrier who gave us the information. It's a great way to monetize it and protect the customer's identity because we're not giving any information away, but also have the carriers partake in a new revenue stream.
FT: TNS is also known for signaling SS7. Does that continue to be a big part of your revenue mix?
DD: We have the largest independent SS7 network, and we're transforming that to a diameter signaling environment that wireless carriers can now trial and see how 4G works within themselves but also 4G roaming. It's also backward compatible to the 3G world because people will be in both worlds. We launched one of our e-Identity solutions with T-Mobile. What that does is it allows T-Mobile customers to be able to have their names displayed in the manner they want them to be displayed. We were able to achieve this through a company we bought in Seattle called Cequint, which provided proprietary handset technology. Unlike an application for caller name, this is embedded on the handset. Rather than being an app it helps adoption rate. What happens is if you have a T-Mobile account, you'd start getting caller name and click contacts and click do not call or put directly into voice mail. When they get that 15 day trial they can sign up for the service for $3.99 a month. This is another great example where a carrier can increase ARPU with what I would say is a really telco-centric product that they're now able to monetize.
FT: So I guess you could do the same with wireline carriers?
DD: For the wireline carrier, you can get the name and number today whether you're a FiOS customer or a Vonage (NYSE: VG) customer or a CenturyLink (NYSE: CTL) you get the name today. What we're going to do is enhance that experience by allowing subscribers to personalize their information. By definition today, you can't control what shows up on their screen. Let's say my wife signed up for the phone service a lot of time when my outbound display is my wife's name, but I want it to be my name and sometimes I want it to be my landscaping business I do on the side. I don't want it to always be the name registered under the billing record. With the wireline customers we're looking to be able to enhance their caller name experience and take them from a name and ID to more of an interactive experience. Part of that could include linking it to a social networking with Facebook and Linked In. If you're in my business contact I could make you my Linked In profile and if you're in my Facebook contacts I could make it my Facebook persona. That's what has been interesting in transitioning this business away from providing just names to providing information that customers want.
FT: Are you signing up customers for these new calling services yet?
DD: Yeah, but I would like to revisit the topic in a few months because there's a lot of great stuff there. On that end we're in discussions with a number of large nontraditional over the top (OTT) VoIP carriers. Their problem is if you sign up for Google Voice (Nasdaq: GOOG), for example, and you put that as your number and you want to send me a $100 check from Western Union they'll deny you because it's not verifiable. The payment companies are looking to authenticate the data. A lot of the stuff from Google, Skype and Vonage and even wireless Mobile Virtual Network Operators (MVNOs) like TracFone are not verifiable so payment institutions shy away from when they get that number. If they could tie it into something that was verifiable they would let those transactions go through. Companies like Google and Skype are losing out on some of that relevancy because they don't have that verifiable tie.
FT: Let's look ahead into the rest of 2011 and 2012. The main goals you have set at TNS are to provide telecom services that integrate with the legacy payment verticals.
DD: Yes, we'll continue to go beyond telecom and really use our relationships with our payment and financial verticals. Those are the folks that have a fraud problem. Half the time they use telephone numbers as the first factor of authentication, but we can give them authoritative data to help the financial companies and consumers avoid fraudulent activity.