The Indian telecom industry has and continues to witness tremendous growth, envy to all in the industry. To cope with this growth, operators need to continuously upgrade their BSS/OSS infrastructure to scale new subscriber levels and increased traffic volume. The CAGR of the global OSS/BSS industry in the past five years has been in the range of 6-7% and the market, according to Gartner, was worth $21.5 bn in 2006. Some analyst groups forecast the market would grow at the same rate for the next five years. The OSS/BSS market in India is growing much faster than the global CAGR of 6% to 7% and the market size for FY '06-07 will be in the range of Rs 5,280 crore. The market, which is price sensitive and flooded with too many players, shows a lot of promise in the global market.

Major Trends
The Asia Pacific OSS/BSS market is comparable to its Eastern Europe counterpart. In India, many operators have changed their billing systems and have standardized on one vendor, especially for postpaid. But the prepaid remained a neglected segment. Also, there has been a general trend for easy adoption mediation system in India. Now, the industry movement for prepaid-postpaid convergence, fixed mobile convergence and bundled service offerings will create a need for convergent systems that can easily scale and accommodate all new generation services. Nevertheless, operators increasingly want a single point of accountability for their IT infrastructure implementations to reduce risk. This in turn has driven demands for Indian SI's and more for huge vendors of BSS/OSS who can be the prime supplier for the entire OSS/BSS, and have first hand expertise more than that of an SI. Moreover, consolidations among these vendors have driven operator's preference for larger, stable vendors.

Companies are also looking at working in a managed services model, which is becoming quite popular among the service providers like Nokia-Siemens that are making this engagement model popular. They will manage network deployment and necessary back end systems to support quick launch of some of these new IP services. This trend may be visible while deploying WiMax networks too. Large service providers are now increasingly going for outsourcing models like Bharti.

The Players
OSS/BSS and revenue maximization products gained considerable traction with telcos realizing the significance of such solutions in improving their bottom line. On the BSS front, billing is the critical area and service providers tried to ensure efficient service delivery. It was complemented by solutions that offer the convenience of accurate and timely billing. Intec recently implemented Singl.eView, a convergent billing product at MTNL and Reliance in India. MTNL is focusing on widening the cellular and CDMA-based WLL customer base, introducing 3G services, achieving at least 500,000 broadband customers and rolling out telecom services in Mauritius through its subsidiary. Its global revenue stood at 240 mn for the last fiscal showing a y-o-y growth of 80%.

Companies such as Amdocs have also grabbed some good contracts for their billing software. Amdocs is approaching its 25th anniversary and continues to be viewed as a growth company. Apart from global clients like BT, Sprint, KPN, Telstra and AT&T, it is now working with VSNL in India.

Bharti Telesoft has consolidated its position in the Indian and other major growth markets, both in South Asian countries like Bangladesh and number of countries in Africa and the Middle East. It also entered the European market with its first sale of an OSS/BSS solution to an operator in the UK. Its revenue stood at 32 mn for FY '06-07 in comparison to FY '05-06 where its revenue was $18 mn, posting a Y-O-Y growth of 80%. It expects to achieve revenue of $55 mn in FY '07-08. In its client list, it added TataSky along with CellTel and Telenor group. The company plans to venture into the Latin American market apart from focused market, like Asia Pacific, the Middle East and Africa.

The Trivandrum-based billing company Suntec, though largely focused on the international market, has key clients in India like BSNL, MTNL, VSNL and HFCL, and gained 93% of its revenue through exports, with the remaining from the domestic market. Another young player in the BSS space, Elitecore, has also got some good contracts from India's leading telecom service providers. BSNL has chosen Elitecore's Crestel as its OSS/BSS vendor for providing Service Selection Portal software for its multiplay broadband project, which is expected to reach 5 mn subscribers across India. Also, it bagged another contract from Aksh Optifibre to provide OSS/BSS solution for its IPTV services to its customers in Delhi and Mumbai. The company's revenue for the last fiscal stood at 10 mn showing a Y-O-Y growth of almost 60%.

The OSS/BSS space in India has an interesting equation. While the domestic market is dominated by MNCs, Indian players like Wipro, TCS, Infosys, Suntec and Bharti Telesoft sell abroad. Obviously, the global market is much larger than the domestic market.

Infosys is quite an active player in the OSS segment but current focus is only on the international market. Though various Indian service providers have approached the company, it is still very keen on international market expansion. Majority of its business comes from North America and the UK while it is also looking at tapping Asia Pacific and rest of the Europe in a big way. The key clients include British Telecom, Telstra and telecom service providers in North America. On the services front, Infosys' top-end revenue comes from customer and product operations areas that include customer billing and order management.

Similarly TCS, FSS, Sasken and Tech Mahindra are also focused on their international operations in this vertical and most of their work involves integration of software systems. Tech Mahindra's business model straddles both telecom service providers as well as equipment manufacturers. In the domestic market, it is handling managed services for BSNL and Idea.

In India, Wipro implemented charging gateway solution and call barring mediation for BSNL, HR portal for Hutch, mediation solution for Spice, and network inventory solution for Bharti. In the Asia Pacific and the Middle East, Wipro concentrated on application development and maintenance, 3G applications testing, data warehousing, MPLS provisioning and CRM for various service providers. In the European and North American market, the company bagged key orders in the IP broadband services domain.

Companies actively pursuing Indian service providers include Convergys, Subex, and Amdocs. CRM deployment in India is restricted to certain verticals and the telecom vertical is where maximum deployment has happened. Around 40% of telecom companies have invested in CRM tools. Since subscriber base of service providers is now running into lakhs and customer relationship management has become complex, CRM deployments have become imperative.

Industry Outlook
Operators are moving quickly to secure market share and as a result, need to ensure that they can deploy new services quickly and have visibility into network resources. For example, VSNL, one of the customers of Cramer Amdocs' OSS division, has just deployed the Cramer6 OSS suite at its Centralized Network Operations Center (NOC) located in Mumbai. VSNL will deploy Amdocs' Cramer6 OSS Suite as the centerpiece of its operations support systems (OSS) to manage its broadband, wholesale voice, as well as enterprise and carrier data offerings.

Consolidation is one more trend among providers, much as we have already seen in the United States and Europe. Finally, the issue of fraud protection will be a target for providers, who will want to make sure that their OSS/BSS deployments are addressing the issue. Not only does fraud lead to a decrease in revenue capture, it also utilizes bandwidth that could otherwise have been used to generate revenue, making fraud a double-edged sword.

Last Word
Although recent years have brought slight consolidation, the $1.5 bn BSS market remains fragmented. The survival of many BSS vendors still looks doubtful. Only the leaders make a net profit, which leaves the door open for mergers and acquisitions in the near future. Many BSS vendors lack clearly defined sales strategy. They often focus on direct sales at the expense of channel relationships which reduce their chance to expand by winning new customers.

Gyana Ranjan Swain
gyanas@cybermedia.co.in