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The OSS/BSS space in India has a interesting equation. While the domestic market is dominated by MNCs like CSG, SchlumbergerSema, and ADC, Indian players like Wipro, Infosys, TCS, and Subex, Lifetree, and Bharti Telesoft sell abroad. Obviously, the global market is much bigger than the consumption in India.

According to VOICE&DATA estimates, revenues accrued from sales of OSS/BSS products to service providers in India were in the range of Rs 175 crore. This was a growth of about 60 percent over the previous year. On the other hand, exports of OSS/BSS products and services would easily be more than Rs 3,000 crore. The overseas client list includes AT&T, Telstra and Sonatel, and Lucent, Sprint, Ericsson, and Nortel. However, VOICE&DATA is taking these revenues as part of telecom software, which is being discussed as a separate segment in the issue. As far as market sizing of the OSS/BSS segment is concerned, we will restrict ourselves to the demand-side in India.

The Spend
Billing continued to constitute the single-largest component of the overall spend by service providers in the fiscal 2003–04. Other major contributors were service creation and provisioning, mediation, interconnect billing, and network management.

 According to VOICE&DATA estimates, mobile and private fixed line operators accounted for Rs 125 crore of the overall spend. By and large, billing revenues added by way of additional licenses and not by new projects. Most new orders were awarded in the earlier fiscal. Subscriber growth happened, but the service provider market headed towards a consolidation phase with the big getting bigger organically as well as inorganically. In such a scenario, most of operators weighed their options and avoided major expenditures.

The fact that BSNL's CDR-based project didn't take off continued to be a big dampener. In the mediation space though, HSS is said to have bagged quite few deals. Growth in existing accounts was an ongoing phenomenon.

A lot of interest was generated in the fiscal 2003–04 on the revenue assurance front. However, the flavor here was-hold. Revenue assurance is yet to become top-of-the-mind. The hype exceeded the reality. HP pushed the concept with much enthusiasm but not headway was created on the front. Homegrown product vendor Subex also played in the space with its fraud management product. Even though it didn't did clinch big deals, it is a player to watch out. It already did a global business of Rs 40 crore for fraud management. In India, it clinched a deal with Tata Teleservices, among others.

In another development, the likes of SAS got active in the OSS/BSS space with their suite of business intelligence products. The company now has clients like Orange, BPL Mobile, and Bharti. BPL Mobile uses SAS's customer retention solution, Orange uses the warehouse administrator and churn management solution, while Bharti uses its churn management solution.

The Outlook
The year ahead could see some consolidation happen. The market has been rife with rumors of ADC's OSS/BSS business being up for grabs. In particular, Intec is said to have conducted some M&A discussions with ADC. If a deal is closed, Intec's product and client portfolio will become quite impressive. The intercarrier billing and mediation company also acquired the convergent billing vendor in September 2003.

This refreshes memories of 2002 when CSG had redefined market equations by first acquiring Lucent's Kenan billing system, and later IBM's customer management solution. Post these acquisitions, CSG suddenly emerged as a dominant force in the OSS/BSS space, particularly in India.

The continued boom in the mobile subscriber base and aggressive marketing by telecom operators augurs well for the OSS/BSS market in India. Also, with fixed line service providers considering broadband and data services, new orders may be forthcoming. However, mobile operators will continue to be the mega spenders, largely in the form of incremental license revenues.

In the OSS space, problems associated with wireless migration may also spawn new opportunities for vendors like Agilent. New OSS solutions will be sought as service providers come to manage a GPRS network in tandem with an existing GSM voice network.

Revenue assurance is an area to watch out. It is finally expected to take off at a CAGR of 30 percent or so. Uptake in data by subscribers will lead to increased revenue leakages in networks, which bodes well for players in this space.

Deepak Kumar