Over the years, the growing wireless user base and network expansion by operators have been key growth drivers for telecom verticals such as operations support systems (OSS) and business support systems (BSS) in India. However, as the Indian telecom industry transitions from basic communication services to next-generation technologies and advanced data usage, there has been a change in the business models adopted by operators; they have revised their go-to-market strategies and upgraded service offerings and their expectations from other players in the telecom value chain has changed. Consequently, operators are now moving towards convergent billing systems and customised OSS/BSS, which can help them deliver higher customer satisfaction, increase efficiency and manage customers and networks in a better way. In addition, the launch of 3G/4G services by operators has necessitated the upgradation of their existing OSS/BSS network infrastructure.

tele.net takes a look at the OSS/BSS market in India, and the emerging trends and key growth drivers in this space…

 Size and growth

The Indian OSS/BSS market has annually grown at 10-12 per cent in the past five years, which is higher than the global average of 6-7 per cent. The market is expected to grow at 15-17 per cent over the next three to four years, driven by proliferation of data and value-added services (VAS), uptake of 3G and 4G services, an increase in teledensity, expansion of rural networks, introduction of innovative solutions by OSS/BSS players as well as entry of new players such as direct-to-home service providers in the telecom sector.

The key OSS/BSS used by operators include order management, business transformation and application maintenance services, network management, customer relationship management (CRM) and billing. Of these, CRM and billing are the most popular functionalities, while solutions such as the service delivery platform are gaining traction.

The market is highly fragmented and comprises over 100 players, most of which cater to niche markets and offer specialised services. The entry of global vendors such as Ericsson and Huawei through business diversification or acquisition of smaller OSS/BSS players has promoted competition in the market. Currently, Amdocs is the OSS/BSS market leader. Other key players offering OSS/BSS functionalities include Comverse Technology, CSG Systems International, Elitecore Technologies, Nokia Solutions and Networks, Oracle, UshaComm, IBM, Subex, Tech Mahindra and Comptel Communication.

 Key opportunities

The country’s changing telecom landscape has had a major impact on operators’ growth plans and strategies. Declining ARPUs and profitability have forced them to host several services on a common network, introduction of 3G/4G services has increased complexity in network management as well as service provisioning, saturating urban markets coupled with launch of services such as mobile number portability (MNP) has shifted operators’ focus from customer acquisition to retention, and growing importance of enterprise customers has made traditional systems redundant. Thus, in order to leverage opportunities and address issues arising from the changing telecom industry dynamics, operators are adopting new, sophisticated and agile OSS/BSS solutions and are upgrading their existing networks. This has resulted in significant growth opportunities for OSS/BSS players. Some of the key growth drivers for the OSS/BSS segment are:

•   Operators’ focus on enterprises: Most operators are now turning to the enterprise segment to drive revenue growth. However, the telecom needs of enterprises are different from those of individual consumers. Enterprises often seek communication solutions that can help them bring down opex, increase efficiency and monitor their businesses. In such a scenario, operators’ reliance on OSS/BSS functionalities to meet enterprise customer demands has increased.

•   Multiplicity of services: Currently, several types of services, ranging from voice to VAS and 2G data to high speed bandwidth-intensive services are available in the market. To deliver these services on traditional networks and handle such varied content, OSS/BSS will be required to undergo continuous modification or upgradation.

•   Changing customer expectations: In the past, meeting customer expectations involved reducing dropped call rates, addressing network congestion issues and ensuring less number of undelivered messages. The data transmitted over the networks was not as bandwidth intensive as it is today. However, in the recent past, smartphones have led to a data explosion on networks, and the quality of service has become a key parameter. Customers have changed from being passive consumers to actively selecting the services they want to access and pay for. A customer-centric approach by operators has driven the need for CRM system deployment and scalability has become an important requirement in any OSS/BSS solution. Further, operators are now keen on understanding and analysing information that flows through their networks to assess the user experience and proactively address issues.

•   Customer retention has become critical: Subscriber addition has slowed down, as most of the markets are nearing saturation. This situation is likely to continue in the future and this has made customer retention a key focus area for operators. Introduction of MNP has facilitated the process of switching operators. Consequently, operators have now become conscious of how they are perceived by customers and are deploying OSS/BSS to deliver quality services.

Therefore, customers want choice and control – to be able to structure their package according to their needs, and to have control of their spending on the same.

•   Introduction of new technologies: Launch of 3G and 4G services has resulted in greater complexity for operators in the areas of authentication, hand-off and network management. As a result, they are turning to OSS/BSS players to provide them solutions that can help them provide and manage bundled services on a converged platform.

Overall, operators are now deploying open and flexible OSS/BSS to support user needs and explore new business opportunities. They are focusing on managing the need for real-time interaction among the network, OSS/BSS, users and technology partners.

Key trends

The increasing adoption of convergent billing systems will drive the OSS/BSS software market in India, which is expected to witness a compound annual growth rate of 16-17 per cent over the next three to four years. Service providers are increasingly looking for a single platform suite that can support their post-paid as well as prepaid service offerings. The use of multiple platforms for revenue management increases capex and opex, besides impacting the customer experience.

Further, the introduction of data and content services that require new real-time interfaces has challenged the batch-billing model of traditional billing systems. Today, post-paid customers demand real-time account control and real-time offers and promotions that are available to prepaid customers. Operators with converged systems can introduce real-time promotions, offers and dynamic pricing and meet the demand of all customers.

Another area where traditional billing systems are at a disadvantage is the lack of real-time support for broadband services. The situation has worsened with the emergence and rapid uptake of content and application services. Customers are looking for instant availability of applications and this has to be supported through always-on services and charging.

The Indian OSS/BSS market has been witnessing a growing demand for customised OSS/BSS software. Telecom operators are moving from technology-centric business models towards customer-centric ones and adoption of customised OSS-BSS software will enable them to offer bundled services and enhance the user experience at every touch point. Critical OSS/BSS functions such as CRM, convergent billing, and revenue assurance have a high requirement for customised software.

The usage of software as a service in the OSS/BSS segment is set to grow, driven by the demand for complex service support and the need to recover investments in legacy systems. The trend is expected to gain momentum as capex and opex savings associated with cloud-based systems become more evident. However, issues related to latency and security will need to be addressed before these services gain mass adoption.

A key emerging trend in the Indian OSS/BSS space is the outsourcing of these systems. Operators are realising that the OSS managed services approach is the best way to ensure customer experience enhancement and effective growth while keeping costs under control. Further, a managed services approach will allow operators to focus on their core business of sales, marketing and network services innovation. Another key advantage of outsourcing to a third-party managed service provider is the ability to overcome several internal organisational barriers that operators face while upgrading and transforming their OSS. In an outsourcing set-up, the management of OSS and business process optimisation is regulated by service-level agreements. In such a scenario, end-to-end operational process improvements are undertaken in a more effective manner. Operators have already started outsourcing BSS and network management functions and have been able to realise several benefits from these arrangements. However, it is important that the partner selected for OSS/BSS managed services should have extensive IT-centric and telecom-specific expertise.

Vendors of network optimisation software are expected to witness a rise in demand for products such as femtocells and other small-cell technologies are being increasingly used to reduce congestion in radio access networks. Further, there has been a rise in the demand for support systems tailored for machine-to-machine (M2M) services. The nature of the support required for M2M service implementation is still not clearly defined as the segment requires different billing and charging models for varying traffic.

Further, operators are now asking vendors to develop products that can be easily and quickly integrated with solutions from other vendors. While most operators  source systems from a single vendor, they want to ensure that the option of incorporating individual platform elements from other vendors in the future is possible without incurring high integration costs.

 Conclusion

Increasing uptake of IP-enabled and converged devices has resulted in steady growth in the country’s OSS/BSS market. The strategic importance of OSS/BSS for Indian operators has grown significantly with mobile and data service proliferation. They have increased their OSS/BSS capabilities, in a bid to adjust to the changing market conditions while meeting growth requirements. Operators are leveraging OSS/BSS to remain competitive in the market. Going forward, operators will continue to rely on OSS/BSS vendors for streamlining processes, driving business efficiencies and ensuring customer satisfaction. These systems, however, are expected to become more agile, flexible and open in the coming years.