As the world of telecom is fast moving from proprietary systems to open standard based systems, a lot of intelligence of networks has shifted to software. The phrase "telecom software", that till very recently, meant applications run by telecom service providers on their computing platforms—like billing & customer care, network management and traffic monitoring—has assumed a much broader meaning.

Telecom software today broadly means anything from embedded software to content. However, for our analysis, we have not taken into account the content-based applications.

Broadly, the telecom software can be classified into three areas, not always mutually exclusive. They are—embedded software, system software, and application software that is used by service providers.

Based on the positioning of Indian companies and MNCs developing software in India, one can classify the nature of development work into four categories—development of software for technology systems; the service provider onsite practices including development and integration; product development and services centred around products, . While most of the big software companies have focused on the first two areas, a new breed of small companies are developing products as well. The large software companies like Wipro and TCS also have flirted with products, but primarily on the application space.

The hot technologies till a year back were IN, SS7 and other software for TDM switching. The current favorite is the entire wireless gamut—WAP, GPRS/EDGE, UMTS—where most of the Indian software companies are focused. A small but extremely important segment is the telephony based applications, software patches for VoIP, VoIP/TDM integration. Routing/MPLS is another small but hot area in the telecom software scene in India. The emerging areas seem to be service management, software broadband aggregation platforms. The leading companies in the forefront of technology development are Wipro Technologies and Hughes Software Systems.

Almost non-existent a couple of years back, a new breed of telecom software product companies are now targeting the emerging application areas like IP QoS, broadband aggregation, wireless-IP integration, etc. Notable names include Amoeba Telecom, BayPackets Technologies, and Mantra Broadband. The successful Indian entrepreneurs in the silicon valley are the catalyst behind this trend.

Strictly speaking, these are not telecom applications. But mobile data applications will also emerge as a major area. This is where small Indian companies can enter.

Usha Communication Technology, Infozech, and Wipro are the only companies with some known OSS/BSS products. While it is difficult to believe that many Indian companies will be successful in the OSS/BSS product arena, this segment creates two opportunities. Almost all the major OSS/BSS companies will come to India and set up facilities. Also, integration of these solutions, especially in Asia-Pacific markets, will create another opportunity for Indian companies.