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With net additions to the wireline subscriber base on a decline, Indian operators, pretty much following other regions, are moving to the wireless segment, striving hard to find a place there. Though relaxed regulatory policies and declining call tariffs contributed considerably to subscriber growth, operator margins have shrunk considerably with declining ARPU. The broadband Internet market segment, with an impressive three million strong subscriber base at the end of 2007, is expected to push WiMax growth in the region.

The only segment to show some formidable growth is VAS or the content segment, with analysts projecting revenues of $348.8 mn by 2009 at a 50% CAGR. As operators look to tap this market, there are content value chain players who have simultaneously bloomed with this segment. Many of these vendors have been able to find a global market for their services. Nevertheless, the Indian consumer market still has to grow from the current low-value services like SMS contests, wallpaper downloads and ring back tones to more high-value services like games, video or TV in the future, in order to see any substantial increase in their ARPU.

To provide all these services not with standing QoS, SPs need to have a robust and scalable OSS/BSS System.

Changing Landscape
The BSS/OSS or Operations and Business Support Systems industry is undergoing explosive growth. Various areas witnessing high growth rate are mobility and broadband. This is coupled with the evolving richer content services and applications. The other significant development changing the telecom landscape is the strong competition in the market with the coming of new players as a result of de-regulation of the industry. Convergence has enabled the embracement of technologies: WiMax to deliver services over increased bandwidths, IPTV to provide quad-play services; and launch of DTH services for the masses.

The competition is further intensifying with service providers continuously rolling out new services, making huge investments in upgrading to new technologies, and expanding their networks for growth and stability. They are innovating their branding and marketing efforts to retain the wallet-share of their customers, maximize ARPU, and fight competition.

However, the global scenario is a bit different. Most incumbent players in global markets have already made their strategic moves with partnerships, organic and inorganic growth to provision triple-play and quadruple-play services to their customers. Majority of these are currently trying to differentiate their services.

While operators in India and other less developed Apac markets are concentrating more on customer acquisition, operators in the developed markets of the US and Europe are striving to retain and up-sell services to their existing subscriber base with innovative loyalty programs, bundles and pricing plans.

WiMax is yet to make in-roads in these regions, as it has seen more easy adoption in less developed markets. The latest services like number portability, location-based services, mobile TV, IPTV, VOD, and HSD are gaining traction in these markets. Nevertheless, ARPU is still not very impressive and its general decline continues. The need of the hour is of technologies that enable the operator to leverage revenue from the content segment.

Mired by Traditions
Most communication service providers have traditional architectures that usually consist of different sets of OSS and BSS systems, each designed to support a particular type of service like mobile, fixed line, SDH, and ATM. In most cases, these systems have become huge applications that comprise several processes and integration points, making them inflexible to cater to current business requirements such as single view of the customer, point of contact for improved customer service, bill for the customer, and launch compelling services and offerings, business agility, etc.

To survive in an intensely fierce and an uncertain business environment, it is obvious that service providers would need to evolve to the new OSS/BSS architecture that comprises standards-based horizontal applications that are open and modular, providing flexibility to evolve as per changing business requirements. This will in turn make businesses competitive and drive the business from a customer centric perspective, rather than service centric. The challenge, though, lies in executing an approach to evolve to new OSS/BSS architectures so that it delivers business value early, while mitigating risks, costs and complexity.

A “Big Bang” approach is fraught with high risks and carries a significant chance of failure, whereas traditional approaches of evolution, often spanning several years, have taken too long to deliver business value and have resulted in very high costs. The ability to evolve to new OSS/BSS architectures while simultaneously being able to manage day-to-day business operations, challenges imposed by introduction of new services/technologies, and possible retirement of applications within predictable costs of ownership are the biggest challenges facing service providers today, as they move toward convergence. And being technology ready to rollout VAS services is where the other challenge lies.

The presence of multiple billing systems is surely a challenge that operators face, especially the bigger ones. The best way to go about it is to deploy a billing system that can not only cater to their IP services but also take bill lines from various service specific systems to generate a consolidated view and convergent bill for customers. Another clever way to take care of the content services is to go for the content aggregator's billing system and get the bill lines back to their systems to arrive at a convergent bill for their customers. In more mature markets, OSS/BSS systems are used mainly as a point of differentiation. The operators use them to enable creation of effective bundles, pricing plans and loyalty programs to retain their customers.

Promising Growth
Much of the growth in the OSS/BSS segment will be with operators deploying billing systems to cater to the NGN rollout. As mentioned before, IP-transactions require a different perspective, which is usually not supported by the operator's existing billing systems. Due to this, large operators are also looking toward a single system across their line of operations to enable them to cater to these new services, cut costs, and have an integrated view of all the service subscriptions from a customer.

As per analysts, the OSS/BSS 2007 external spend is estimated at $26 bn. The market has experienced a CAGR of 6-7% for the last five years with OSS estimated to be at 10-12%, alone. The Indian OSS/BSS market is growing much faster than the global CAGR. While the industry is driven toward the Next Generation OSS (NGOSS) and other standardization across the integration layers, converged offerings will be the focus, as it contributes to directly reducing ownership costs for operators.

As new networks move toward 3G/4G, VoIP, WiMax, etc, more concentration will be on the OSS part specifically, in the areas of network planning, template creation, visualization and management-areas different from traditional circuit switched networks. On the BSS front, the focus will be on convergent billing and order management infrastructure.

Buying Tips
Telcos must seriously look at interoperability of products they buy. Other equally critical aspects are scalability and performance of products, and credibility, financial stability and support infrastructure of vendors, etc. While investing in these products, telcos must carefully study and document their real requirements and assess products accordingly. Extensive vendor and product evaluation, complete with reference checks and site visits, must be instituted. More specifically, telcos should evaluate solutions against the following parameters:

Ability to Address Problems: Today, telecommunications operators must do more with less. Despite drastically reduced budgets, they must continue to deliver new services, build customer loyalty and improve operational efficiencies. They must find ways to incrementally increase their profits while also keeping churn rates at bay.

In order to ensure that operators maximize revenues in the current climate, vendors must address today's emerging business models as well as the business models of the future, transparently and seamlessly.

Vendor Responsiveness: One most important attribute of a billing solution is to be agile when responding to new and changing requirements. Persistent innovation and rapid time-to-market have always been major challenges. It is important for the billing solution provider to be very closely tied to the service provider, in order to understand their current and future requirements clearly, including any regional implications. If needed, then to the extent of having a say in planning of services and guiding the service provider toward future services.

Best-of-suite Solutions: The current trend is that the best-of-breed software products are being replaced by best-of-suite applications in the complementary BSS and OSS areas. By providing a common architectural framework that requires little up-front work or investment to tie the billing and customer care systems together, operators can lower operational costs while having the ability to handle a wide range of tasks-from providing customer support to billing the customer to generating new revenues. This is one dominant trend where operators want to be assured of the depth of functionality and breadth of options, and at the same time ensure ease of integration and interface to third-party systems.

So operators should look for integrated ordering and customer management, billing and balance management, and revenue enablement coupled with an extendible and flexible architecture.

Integrated Approach: The platform should seamlessly link three main solution sets together.

Customer management solutions-Front-end customer care applications should be visible within the platform that focuses on increasing customer satisfaction and retention as well as the value of each customer.

Billing engine-At the core of the framework should reside a billing engine that is able to rate and bill for any service offered in the telecommunications industry.

Revenue enablement-In order for providers to capture revenue streams from evolving next-generation services, they must be able to manage complex multi-party content and partner agreements as well as provide a single view of the customer to deliver quality service.

Connecting these three pieces with the over-arching framework brings together the power of the platform. Placing the business logic directly into the framework allows for easy and low-risk integration when adding new solutions to the platform. As such, billing and customer care vendors can take the initiative to step up in the service providers' enterprise so that the enterprise doesn't have to step down to them. Providing a clear, single view of the customer-from the billing to customer care perspective-service providers have the advantage to speak to their customer in the language they demand.

Differential Billing: While there is an imminent need of a robust and scalable rating engine, this has to be thought through very carefully as the ratio of prepaid to postpaid subscribers is quite disproportionate (7:3). Clearly, there is a requirement of a differential billing platform, and there are innovative solutions from various vendors to cater to this. Other than the rating engine, this solution will also require probes for the IP network as well as mediation system.

The Currency of Content: Content has created a new value chain where content providers, advertisers, clearing houses and network operators all play a role and retain a portion of a single transaction value. As such, a new business model has emerged where the simple one-to-one operator-to-customer relationship is now a many-to-many relationship. The business model based solely on profitably processing customer contracts involving relatively static portfolio tariffs and discounts has been replaced. Business now demands the management of complex multi-party partner agreements that are dynamic and partner tailored.

A business solution is needed which can manage these agreements and settlements with the appropriate parties. This emerging business model finds network operators responsible for the distribution of shared revenue to partners from a content event that occurred using its network.

Network operators are partnering content providers, content aggregators and portals. The portal is most often responsible for creating and managing agreements with the content providers while the network operator manages the settlements system. If operators do not initiate partnerships and arrange revenue-sharing agreements with content providers, they could be cut out of the revenue loop. Managing the end-to-end agreements with all parties is key to the operator's success.

Electronic Bill Presentment & Payment (EBPP) and Self Care: Two major business drivers are seen to be the key toward an increased demand for EBPP and self care systems-the continuous challenge to reduce operational cost and the market shift toward an electronic lifestyle. EBPP and self care enable operators to reduce cost of operation in generating paper bill and delivery of paper bill, in routing more customers away from the call center into Web-based customer self care also improving the revenue collection. The rise of the electronic or digital generation also meant a shift toward self care, which will put great control into the hands of these customers as well as increase the quality of customer service.

Dynamic Balance Management: Dynamic balances as opposed to monthly bill will become the order of the day instead of monthly bills. For example, a subscriber may have a credit balance on their mobile voice charges through an external loyalty scheme, which could be offset by the debit on their mobile data charges. Operators are known today to facilitate micro payments, but there is a huge opportunity for operators to capture the revenue pool via facilitating macro-payments as well.

Focus on Prepaid Data and Prepaid Content: In most Asian countries, the growth of prepaid subscribers has outgrown that of postpaid systems. The prepaid sector is a very lucrative and powerful segment that cannot be ignored. The ability of operators to be able to extend data and content services to prepaid customer and capture those revenue would be critical.

Gyana Ranjan Swain
gyanas@cybermedia.co.in