The Indian telecom market is in its growth phase, despite recent regulatory issues. With the new minister expected to deliver on removing the bottlenecks by the second quarter of 2003-04, action is likely to begin again on implementation of growth strategies by different operators, both mobile and fixed line.

However, the factors that will drive the market and the way business will be done will be extremely difficult. The major qualitative changes that the market will encounter are as follows:

n Second Round of Growth: Free incoming regime will mean new entrants. Most of the new users will join as prepaid users. That will see an explosion in prepaid subscriber base. So far, the operators have not started new marketing campaigns targeting new users. Once the regulatory pressures are off and the tariff regime becomes clearer, they will market it to new users.

n Network Quality Will Be Marketed: In mobile, airtime rates have fallen to all-time lows. These are probably the lowest rates anywhere in the world. This will not only grow the subscriber base, but also see a spurt in airtime usage. That will lead to more pressure on the networks and quality will be an issue. Operators will not only have to work on this, but also market network quality. To some extent, companies like AirTel have already started doing that.

n SMS Applications Will Be Key Differentiators: For GSM operators, SMS, that has already become popular, will continue to drive up ARPU. Peer-to-peer SMS will grow on its own in terms of number of SMS sent per day. However, operators have to create premium content and look at contests and promotions. That will see SMS becoming a strategic tool.

n Multimedia Applications Will Grow: With Reliance taking pioneering steps, both CDMA and GSM operators will focus a lot more on games/video and other such multimedia applications. That will change the way the telecom service is positioned today.

All this will have a direct impact on the billing and OSS strategies of operators. While broadly, content billing will grow as an area, a lot more focus will be on service activation and service monitoring, while the initial planning for network optimization/operations optimization will begin.

Where Are the Gaps?
Broadly speaking, there are only a few gaps, but they are so crucial that they impact not only the overall output of the systems but also the entire business process.

n OSS and BSS Remain Distinct Functions: The biggest gap is that OSS strategies and BSS strategies are on their own distinct paths and there is very little integration between the two. Let us consider two examples to see how the OSS/BSS integration will bring value to the users. First a mobile operator who provides a content service, say where consumers can send an SMS to get scores. Today, not many operators can boast of a reverse credit when the SMS request does not get fulfilled. Typically, a true OSS/BSS integration would provide information on the service request that could not be fulfilled and accordingly reward the user for non-performance. On fixed line services, a VPN service taken from a service provider never gets the due credit, as there is seldom a sure-shot way in which an operator can prove/disprove service availability. Most operator SLAs are yet to conclusively cover this area.

n Too Much Dependence on Vendors: Yet another short-term approach, it not only makes the whole thing expensive, but also prevents operators from getting an independent perspective so as to see the future problems. This, despite the fact that India is home to some of the best system integrators in the world, like Wipro, Infosys, Satyam, and TCS. BSNL, with its CDR-based billing project, has taken a step in working with SIs. Private operators have to do it sooner or later.

n Postpaid Billing Migration for GSM Operators Is Complete, but Issues Remain: Most of the mobile operators have changed their billing systems and have standardized on one vendor. But in most cases, they have gone for the history of the vendor—or simply the number of years behind him—than the actual product quality and support capability. While this does not suggest that all the older vendors should be shunned, many CIOs ‘confess’ that day-to-day issues are so much that none has any time left to do long-term planning. So most of them have gone for a reliable name and promise for a smooth migration, rather than flexibility and how future-proof the system is. This means ‘postponing’ the problem, rather than ‘solving’ it. While this year may be smooth, expect nightmares again in 2004.

n Prepaid is Still Neglected: While most operators have changed their postpaid billing system, there is still no major decision on prepaid. Partly because prepaid users are not the priority customers for operators (despite their large number) and partly because CIOs are not too familiar with the existing prepaid system. Many others are waiting for a true prepaid-postpaid convergence, which remains elusive. And till that happens, they are not doing anything to standardize on customer care and a common database.

n CDMA Operators Haven’t yet Launched Prepaid: CDMA operators, who are banking on its affordability have also not done anything on prepaid. This is surprising considering the fact that almost the entire low-end price-conscious market in GSM is prepaid.

n SMS Is not Getting the Attention It Deserves: While most of the operators do acknowledge the criticality of SMS to their businesses, none of them have a way of charging for SMS other than a flat rate. As content becomes more prevalent and enterprises look at using SMS for their B2C, B2B, and B2E applications, not only will the SMS system have to be reliable, functionalities such as billing for premium content, reverse credit, and reverse billing will have to be incorporated.

n BSNL and MTNL are Treating Services Differently: BSNL and MTNL, which provide wireline, CDMA wireless and GSM wireless have treated these services as independent services. They are not leveraging their existing subscriber base and hence not utilizing their inherent strength to tackle competition. Imagine a BSNL user getting a single bill for all his usage of GSM and wireline with incentives on large usage. Such moves will give BSNL a huge advantage over mobile operators.

n Mediation Is Still an Afterthought: For Indian operators, who decided the importance of a system based on how much it cost, mediation was something that did not need a rethinking. For most of them, it was the billing vendor that provided mediation and provisioning. A mediation system can actually tell an operator whether he is going to make or lose money by introducing a service, especially if the operator actually goes for value-based charging from time/data size-based charging. As Indian operators go for differential price-based services like GPRS, a good mediation system is a must.