Essential for achieving high standards of service quality, the operation support system/business support system (OSS/BSS) market is no longer restricted to just a select few operators attempting to gain an edge over their competitors.With new players entering the market and the advent of new technologies and applications like 3G, Wi-Max and internet protocol television (IPTV), OSS/BSS applications are now a "must-have" for the smooth and effective functioning of every telecom operator's business.

Till now, the OSS/BSS market has grown in tandem with the telecom market, which is registering 15-16 million subscriber additions. With 3G and WiMax auctions slated to be held in January 2010, the next year is expected to be even bigger for the OSS/BSS industry. The growth in the number of technologies will increase the number of elements that need to be managed, to do provisioning in and to be attached to the billing system, necessitating an OSS/BSS port that is capable of communicating and managing all the different systems.

Moreover, with mobile virtual network operators coming into play, there is likely to be significant innovation in the areas of revenue sharing, sales commission processing, upselling and bundling/unbundling of various products and services. It will also put substantial pressure on service providers to launch value-added services, providing a significant boost for OSS/BSS.

Mobile number portability is also slated to be introduced soon and once implemented, will boost the adoption rate of OSS/BSS as telecom operators hasten to increase service efficiency in the face of the likely increase in subscriber churn.

Also, the increased emphasis on quality of service will ensure that operators invest appropriately in their OSS/BSS. For instance, the Telecom Regulatory Authority of India (TRAI) has recently released its regulations on the quality of service (QoS) standards for both wireline and mobile services. For wireline services, TRAI has specified that billing complaints should be resolved within a maximum of four weeks.

According to N.K. Gupta, general manager, consumer fixed access, BSNL, "Customer care is the biggest factor driving investments in these systems. Prevention of revenue leakage is another key reason for investing in these systems. OSS/BSS increase operational efficiencies within the organisation and are important for better standardisation of processes within the organisation."

Industry trends

The OSS segment includes applications that aid in service provisioning, inventory, fault performance and system integration while the BSS segment primarily comprises applications that assist in billing automation, customer management and ordering.

For the past five years, the OSS/BSS market in India has grown by 10-12 per cent per annum. Industry sources estimate that in the next five years, the OSS compounded annual growth rate (CAGR) would be somewhere between 8 per cent and 12 per cent while the BSS CAGR is likely to be in the range of 4 per cent to 8 per cent. This is in comparison to the 6-7 per cent CAGR registered globally. According to research firm Frost & Sullivan, the Indian OSS/BSS market is estimated to grow at a CAGR of 17 per cent for the next seven years from $492.7 million in 2008 to $1,508 million by 2015.

At present, among the various OSS/BSS segments, customer management –­ customer relationship management (CRM) and billing –­ is the largest contributor to revenues. While CRM is the most sought after, billing contributes around 30 per cent to customer management OSS/BSS applications. Other significant OSS/BSS applications are network operations management and emerging services such as service delivery platform (SDP). Applications like network operations management have gained momentum due to the increased requirement of customers for superior QoS. Earlier, such tasks were done more as a routine job. Business intelligence is also necessary given the operators' shift in focus from subscriber acquisition to consumer profiling. (It has become increasingly important for companies to categorise their subscriber base into different segments, depending on factors such as ARPU and usage.)

Industry studies show that in terms of business models, strategic outsourcing is the most dominating model followed by business transformation and application maintenance services. This, in turn, has driven demands for system integrators/ managed service providers and end-toend vendors of BSS/OSS who have firsthand expertise.

Among the least used business models, there is out-tasking, which is not preferred by telecom service providers and is expected to grow at a CAGR of below 5 per cent, the lowest growth rate amongst business models.

Operators are also increasingly shifting to next-generation OSS/BSS, which can handle billing and customer acquisition for multiple services on a single platform. For instance, Reliance Communications upgraded its current Intec Convergent Billing (Singl.eView) installation to the latest version (6.0) and signed contracts for Intec's Content Partner Management solution. Similarly, Mahanagar Telephone Nigam Limited (MTNL) is looking at deploying convergent billing.According to Kuldip Singh, director, technical, MTNL, "With respect to next generation BSS, we are looking at deploying convergent billing. This involves providing one combined bill for all the subscribers for all the services. At present, we provide different bills for different services to each subscriber and are not able to bundle the services together."

Recent developments

All key telecom operators have invested in OSS/BSS and have entered into contracts with vendors for the same. For instance, Bharti Airtel is working closely with Ericsson, Nokia and IBM for its integrated OSS/BSS solutions to ensure better QoS for its customers. MTNL has recently launched its prepaid broadband services for consumers and enterprises in Mumbai and is utilising Sterlite's Prepaid Broadband Solution and OSS/BSS.

Bharat Sanchar Nigam Limited (BSNL) has also invited bids for outsourcing its OSS/BSS for its 93 billion GSM line contract. The bidding is still in process. For the north zone, the second lowest and third lowest bidders –­ Tata Consultancy Services (TCS) and Spanco Telesystems –­ are likely to bag the contract (TCS was the second lowest bidder at Rs 9.06 billion followed by Spanco Telesystems at Rs 10.2 billion while Infosys Technologies bid Rs 10.67 billion). For the other three zones, HCL was the lowest bidder. Earlier, BSNL had granted a Rs 10 billion order to HCL and TCS for its landline business, which currently has distributed databases.

In June 2009, Idea Cellular awarded a five-year Rs 1.45 billion outsourcing contract to Firstsource Solutions. According to the contract, Firstsource will provide customer management services and billing services in Idea's Kerala and Tamil Nadu circles.

New players also expect a lot from OSS/BSS players as such solutions are imperative for them to increase profits. IPTV players, for example, aim to offer their customers service level activation in 10 minutes, which is a job for OSS/BSS players. Industry estimates indicate that new players are likely to place orders worth about Rs 20 billion for OSS/BSS products and applications.

Unitech Wireless has, for instance, granted a five-year, multi-million dollar IT contract to US-based software service provider Telcordia. According to the contract, Telcordia will provide real-time charging solutions for Unitech's prepaid mobile subscribers across its pan-Indian GSM network besides providing billing solutions for the operator's value-added services. Telcordia is already providing prepaid recharging solutions to Idea Cellular, Tata Communications and Aircel.

Companies like Aksh Optifibre are also tying up with OSS/BSS players for providing applications like IPTV. The OSS player, Elitecore Technologies, has tied up with Aksh Optifibre to roll out IPTV services for BSNL subscribers in 20 cities.

Meanwhile, domestic OSS/BSS vendors are also busy bagging international contracts. For instance, Subex has successfully completed upgrading its Revenue Assurance and Fraud Management solutions for MTN Yemen, which provides wireless mobile telecommunication services in Yemen.

Moving forward

There are several challenges that need to be ironed out for the OSS/BSS industry in India to succeed. Operators must be able to identify the right mix of applications without compromising on costs, ease of configurability and manageability. For instance, while one vendor may be good at planning the synchronous digital hierarchy (SDH) transmission circuits, another may be better in the metro Ethernet domain. Similarly, while one vendor may offer strong auto-discovery capabilities, it may not be strong in modelling and representation of assets.

Singh elaborates, "We would like to have a single OSS/BSS vendor for all our processes. For OSS, we have come out with an expression of interest for deploying next-generation OSS. But for a company like MTNL to provide one OSS covering all services is a big challenge."

Migrating from legacy systems is also a challenge for operators. When operators implement OSS/BSS, the new systems may be different from the existing legacy systems and there may be variations among the different systems that are prevalent.Integrating these systems is an issue.

Scalability of IT systems is also a major concern and the most significant requirement for any telecom service provider in India. Consequently, service providers must invest in scalable OSS/BSS, which will not only cater to the current over 500 million subscriber base but also to the significant subscriber additions that are likely to take place in the coming months.

Nevertheless, with a plethora of opportunities to tap and issues to iron out, the OSS/BSS industry is looking at busy times ahead.