Symbiosis Institute of Telecom Management

OSS/BSS Current Scenario Telecom Software

Amol Tode 01-Mar-2010

Contents Telecoms Software Challenges of 2010 ........................................................................................................ 3

OSS and BSS Market Overview ..................................................................................................................... 3

OSS/BSS challenges ....................................................................................................................................... 3

Indian OSS and BSS Market Overview .......................................................................................................... 3

Service Fulfillment Market Review ............................................................................................................... 6

Telecoms Software Challenges of 2010 • How CSPs are using Web 2.0 to bring new services to market • How much of an impact service-oriented architecture will have on the telecoms market • What traditional IT suppliers’ role is and how they are developing their strategies to win more

telecoms business • The software points of convergence for IT and telecoms services • How service management and the importance of the customer experience is shaping CSPs’ internal

development activities and the commercial software investments in the traditional OSS and BSS market segments

• How the separation of the network and service layer, which creates a more compelling reason for Internet and media companies to enter the telecoms market, will disrupt the market.

OSS and BSS Market Overview

Analyst firm OSS Observer believes that global OSS spending will grow from $13 billion in 2005 to $18.7 billion in 2010 at a 7 percent CAGR. They also forecast that the $5.7 billion mobile OSS segment will grow to $9.5 billion in 2010 at an 11 percent CAGR (much faster than wire line’s 4 percent growth). The growth is driven by increased investments in data services, increased competition in Europe and North America , wide scale UMTS deployments, and a focus on the customer experience.

OSS/BSS challenges • Customer Care / Self Care (a critical ingredient of customer centric quality • of experience) • Customer Service Assurance • Revenue Assurance • Business Analytics / Business Intelligence

Indian OSS and BSS Market Overview OSS BSS Solutions Market Growing Rapidly in India. The remarkable growth of the Indian telecommunication industry has led to the increased demand for OSS BSS solutions. The decreasing average revenue per user (ARPU) in a predominantly pre-paid market has forced telecom service providers (TSPs) to look for alternate revenue sources such as value-added service (VAS) and increase focus on customer satisfaction. OSS BSS solution providers also have to meet increasing demand from the IT sector, which is trying to cope with a rapidly increasing subscriber base. Functionality-wise, customer management (customer relationship management and billing) contributes the most to the revenue pie, followed by network management and emerging services such as service delivery platform (SDP).

Despite these developments, the scalability of IT systems is major concern and a significant requirement for any TSP in India. Thus, TSPs are likely to outsource end-to-end systems rather than selected functionalities, as is the practice in the more developed markets. 'The customer-centric approach by

TSPs is the major force behind the growth of customer management systems, while scalability is the most sought after requirement from any OSS BSS solution,' says the analyst of this research.

The demand for OSS BSS solutions is expected to continue due to further refinements and innovations in engagement models. 'An increasing number of IT vendors will engage in revenue sharing models, heating up the competition,' notes the analyst. 'Competition in the market will further intensify with the entry of more TSPs as well as the rollout of 3G and mobile number portability (MNP). Solution vendors will do well to keep an eye on the requirements of TSPs and customize their offerings accordingly. These factors have fuelled growth of OSS BSS solutions brought about by emerging services like Service Delivery Platform (SDP), which help in faster rollout of services.

The OSS BSS market registered 10-12 percent year-on-year growth for past five years, which is significantly higher than global CAGR of 6-7 percent. Frost & Sullivan’s 2008 study on Indian OSS BSS market, expects this market to grow at 17 percent CAGR for the next seven years reaching a market size of USD 1508.0 million by 2015 from current size of USD 492.7 million. In terms of business models, Strategic Outsourcing is the most dominating model currently followed by Business Transformation and Application Maintenance services. Out-tasking is not preferred by Telecom Service Providers (TSPs) and is expected to grow at a CAGR of below 5 percent, lowest among all business models. Functionality-wise Customer Management (Customer Relationship Management and Billing) contributes the largest revenue. While CRM is the most sought after functionality, billing contributes to 30 percent of Customer Management. Other significant functional areas are Network Management and Emerging Services including Service Delivery Platform (SDP).

Scalability of IT systems is major concern and most significant requirement for any TSP in India. Thus they like to go for outsourcing of end-to-end systems rather than out-tasking of selected functionalities as practiced in more developed markets. Coupled with a paucity of funds, this is the most important factor in emergence of Strategic Outsourcing, based on a revenue sharing model, as the most practiced business model in India. Frost & Sullivan predicts that new players will ink outsourcing deals worth USD 2 billion with IT firms and will change the market share of IT service providers significantly in the near future.

Customer centric approach by TSPs is the major force behind growth of Customer Management systems, while scalability is the most sought after requirement from any OSS BSS solution. The trend is expected to continue in future with entrance of new TSPs, rollout of 3G and Mobile Number Portability (MNP), which will further intensify competition.

OSS/BSS Indian Industry

OSS-BSS Vendors Customers (Service Providers) Comverse BSNL Airtel Reliance MTNL Vodafone Bharti Airtel Aircel Tata Teleservices LHS Idea Reliance Intec Loop Telecom Reliance Infocom IBM Vodafone Idea Suntec VSNL HFCL Infotel BSNL Amdocs BSNL MTNL VSNL HFCL Elitecore Aksh BSNL MTNL HFCL TTML Spice Hathway In2 Cable Bharti Telesoft Vodafone TataSky Telenor group Wipro BSNL Spice Aircel Bharti Airtel

Service Fulfillment Market Review Worldwide service fulfillment spending is forecast to grow from USD2.17 billion in 2008 to USD3.16 billion in 2013, which represents a CAGR of 8%.

Growth in the service fulfillment market is projected to be less affected by the economic downturn during 2009–2010 than the markets for OSSs that are judged to be non-revenue-related. Growth will continue in 2011 at rates close to the 2007 growth rates, driven by the need to fulfill increasingly complex service bundles for communications service providers (CSPs) in mature markets, and by the competitive growth and maturation of CSPs in emerging markets – especially in the mobile and residential broadband segments.

Service Fulfillment Vendor Profiles

Actix Aircom GE Smallworld Amdocs

Aria Asia Info HP Comptel

ConceptWave CSG IBM Ericsson

InterGraph MapInfo NEC Oracle

Sigma Systems Subex Synchronoss Telcordia