OSS/BSS: Three Shots in the Arm

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It is an irony that in the year 2002–03, the developments that kept the billing, customer care and mediation vendors on their toes and built a high level of interest about the Indian OSS/BSS market in the international vendor community, yielded zero revenues for the industry. The mega CDR-based billing project of Bharat Sanchar Nigam Ltd that was supposed to herald a new era in billing and customer care in India, has not progressed beyond presentations by a dozen-odd system integrators-led consortia.

However, the billing vendors did brisk business with the mobile operators. Three reasons contributed to the healthy run of the industry.

One, many operators changed their billing systems and migrated to new ones, driven by two factors. First, billing systems deployed earlier had exhausted their life cycle and needed replacing. Two, large-scale mergers and acquisitions, accompanied by the trend to standardize billing systems meant that billing vendors got not just repeat orders but also made money from services as the migration was often complex, thanks to lots of home-grown patches.

Two, the mobile subscriber base swelled to double by the end of the fiscal, thus ramping up the license revenue of billing vendors.

And finally, new operators entered the scene. In particular, BSNL’s spectacular success in creating new markets helped billing vendors.

Not surprisingly, out of a total of Rs 110.5 crore billing, customer care, mediation and provisioning business done in the year 2002–03, a whopping Rs 85 crore came from mobile operators. About Rs 14 crore was spent by fixed operators (BSNL not included) and the rest Rs 12.5 crore came from interconnect billing.

These figures, however, do not give an exact picture of revenues from core billing products, as these include the cost of mediation, add-on applications and services provided by system integrators and billing vendors themselves. In GSM, the core billing product accounts for less than 40 percent of the total operator spend on billing software and services. These do not include the hardware figures. On an average, a postpaid billing vendor earns about $0.6 per subscriber for older customers with more than a million subscribers, and about $1.1 per subscriber from new customers. However, the mobile operators spend almost $1.5 per subscriber.

A clear break-up is difficult to ascertain for fixed operators, most of them being in the low-subscriber base phases. Also, the add-on applications are few. For interconnect billing, a rough pricing was about $0.3 million for 10 million CDRs. Other components were negligible.

The tendency to standardize by the big mobile operators was evident. Bharti went for not just standardized but a centralized implementation of CSG’s billing that it purchased a year ago. Hutch and Idea standardized on SchlumbergerSema, taking a mix of centralized and decentralized approach. BSNL, which awarded its four zonal GSM contracts to three different network equipment vendors, chose a single system for billing.

CSG also led in the fixed service market. Out of the three big private operators—Reliance, Bharti and Tata Teleservices—both Bharti and Tata chose CSG. Only Reliance went for ADC.

While the core billing system market was held by a few biggies, the add-on applications market saw some activity with some smaller companies making some headway. Bharti Telesoft, Lifetree, Infozech, and Brainroots are some companies that are active in this market place.

In the interconnect billing market, it was Intec all the way, which bagged orders from almost all operators—BSNL, Reliance, Bharti, and Tata. Some mobile operators tried a few home-grown systems.

Software services companies like TCS, Wipro, HSS, and Infosys became interested, because of BSNL’s approach where it asked the systems integrators to front-end. If that project starts this year, it is expected that there will be major changes in market dynamics, with professional services coming to the fore.

There was not much movement technologically on the prepaid front, but prepaid-postpaid convergence was the topic of intense debate, though the market did not make much progress in that direction.

Mediation systems are being seriously looked at again. Private fixed operators have gone for some kind of mediation and provisioning from day one. Here, on number of installations, Comptel and HSS share the honors, but almost all new contracts went to Comptel.

Year 2003–04 could be the big year if the BSNL project actually moves ahead

Shyamanuja Das