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Strategic Support: Transition to convergent OSS/BSS platforms

January 07, 2013
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The Indian telecom landscape has changed over the years and so has the role of operations support systems (OSS) and business support systems (BSS) in the telecom domain. The declining ARPU has given a new dimension to competition in the sector and operators have shifted their focus from price-led rivalry to attracting and retaining high-value customers.

In a bid to retain a competitive edge, operators need to offer new and innovative services that are reliable and cost effective, and can be delivered quickly. Further, the increased uptake of broadband, smartphones and related applications, as well as the launch of next-generation services such as 3G and 4G has shifted the operators’ focus towards business objectives such as quality of service, end-user experience and customer satisfaction. Clearly, an operator’s ability to meet next-generation communication needs has become a key differentiator in maintaining market leadership.

In such a scenario, OSS and BSS have become critical components for the success of operators and are playing a strategic role in helping them establish differentiating capabilities in the industry. OSS and BSS platforms provide a consolidated view of the entire cycle of customer data and network assets, and enable operators to streamline and automate products and services to ensure speedy time-to-market. This allows operators to become more customer centric in their approach and respond with specific services to best suit end-user requirements. OSS/BSS solutions facilitate critical processes of order completion, service provisioning, assurance and billing.

Market composition

The Indian OSS/BSS market was estimated at Rs 38 billion during financial year

2011-12, and is expected to witness significant growth in the coming years. The market is highly competitive and comprises over 100 players, most of which cater to niche markets and offer specialised services. The top 10 players in the segment account for less than half of the market share, resulting in intense competition and constrained profitability. As a result, the segment offers significant opportunities for consolidation. In January 2012, Ericsson completed its acquisition of Telcordia for $1.15 billion. The deal helped Ericsson gain a major share in the Indian prepaid market.

Besides Ericsson, other key players in the market include Amdocs, Aricent, Elitecore, Comptel, Oracle, Subex, CSG Systems, Comverse, IBM, Wipro, TCS and Tech Mahindra. For instance, Bharti Airtel has utilised the services of Comverse, Elitecore, Oracle, CSG Systems, IBM, Subex and Comptel over the years. Idea Cellular has been a key client for Ericsson, IBM and Subex, while Vodafone India has utilised solutions offered by Amdocs, Comverse, Subex and Comptel. Similarly, the state-run operators, Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited, have signed deals with Elitecore, CSG Systems, Oracle and Comverse, among other players, for procuring OSS/BSS solutions. Aircel and Reliance Communications have partnered with Comverse, CSG Systems and Subex. Elitecore, Comverse, Comptel, Subex and CSG Systems are providing solutions to Tata Teleservices Limited.

In terms of product and solution offerings, the market is characterised by rapid technology upgradation. The range of products varies from traditional OSS/BSS services to customised niche services such as content settlement. The functionalities offered by the vendors in the OSS and BSS domain include billing, customer care, order entry and provisioning, network operations and management, service assurance, anti-fraud and security, marketing and sales support. For instance, Subex’s offerings include revenue assurance, fraud management, credit risk management, interconnect billing, interparty management, route optimisation, cost management, service provisioning and activation, order management, network optimisation and data integrity management. Elitecore offers billing and revenue management. Comverse offers billing solutions and customer relationship management (CRM). Oracle offers solutions such as billing and revenue management, the service fulfilment suite, CRM, network management, order management, service delivery and business reporting. CSG offers inventory, customer and order management solutions.

According to analysts, performance management, provisioning and service activation, and inventory management are the most popular OSS/BSS solutions. Other key functions like revenue assurance, billing and customer care, and mediation are emerging as BSS solutions.

Key trends

The significant growth in the Indian telecom sector, both in terms of subscriber numbers and the introduction of new technologies, has been a key driver for the OSS/BSS market. Operators’ increasing focus on customer experience, business intelligence and innovation in handling network congestion has also fuelled the growth in these segments. Operators are making continuous efforts to drive down costs and improve revenue margins. To generate additional revenues and maintain a competitive edge, they are coming up with innovative offerings and deploying cost-effective solutions provided by OSS/ BSS vendors for streamlining processes and making system usage cheaper. Telecom service providers are also making a transition from silos of fragmented systems to seamlessly integrated enterprise applications that connect customer experience to service provisioning and billing.

Another factor that has led to growth in the OSS and BSS segments is the increasing need to upgrade traditional systems. This need for systems upgradation has become more pronounced with the roll-out of 3G and the introduction of 4G services. These technologies have increased the complexity in operations and billing processes, customer information systems and financial applications. Further, mobile number portability has also necessitated enhancements to the existing OSS and BSS platforms. As a result, telecom service providers are demanding an easy-to-maintain, agile and flexible IT system comprising the OSS and BSS platforms at an affordable price point. They are now earmarking huge investments for upgrading to new solutions and platforms.

The demand for OSS/BSS solutions is also being driven by refinements and advancements in engagement models. Several IT vendors have partnered with operators through revenue sharing models, thus intensifying competition in an already fragmented segment.

Operators are increasingly opting for a convergent OSS/BSS platform, which has become the need of the hour, given the rapid development and deployment of new services and applications. The convergence of OSS and BSS platforms results in improved efficiency, maximised asset utilisation and reduced opex and capex. This, in turn, enables effective management of network, products and subscriber systems besides improving customer support processes such as rating, billing and charging with real-time capabilities. Further, the convergent end-to-end platforms allow a unified customer- and service-level view to an operator, resulting in rapid time-to-market. By using these analytical reviews, operators can receive more value from customer data. Convergent billing has become a norm, with service providers opting for either a complete stack from a single vendor or for multiple vendors to provide convergent OSS/BSS modules.

Going forward

The growth of IP-enabled and converged devices has given a fillip to the OSS/BSS market in India. Speed-to-market has become crucial and has increased operators’ reliance on these systems. The increasing operator need to offer new services to keep pace with rapidly changing technology will further fuel segment growth.

OSS/BSS solutions are increasingly being used by operators to improve operational efficiency, revenue margins and improve the customer experience. As operators shift towards 3G and 4G, pricing plans based on volumes, speed and application will become more complex and necessitate significant investments in billing, inventory management, CRM and network management. In fact, providing next-generation customer care is a key factor that will drive the popularity of convergent OSS/BSS platforms.

Going forward, increasing complexity in operator-consumer and operator-partner relationships will ensure that the OSS and BSS segments continue to be a critical component for operators. Service providers will continue to extend their propositions well beyond connections to cloud-based infrastructure, software offerings and enterprise machine-to-machine applications, which will require expanded BSS and OSS platforms. Infrastructure consolidation and virtualisation to set up data centres will also contribute to the growth of the OSS and BSS segments. As OSS/BSS solutions become more convergent in nature, consolidation of billing services, a single window for service provisioning and customer life-cycle management would be the key differentiators for telecom operators in meeting customer expectations.

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