Last year was an active period for communications service providers (CSPs) and for suppliers of billing and OSS technology. As Tier 1 carriers continued to face consolidation of both core business and relevant infrastructure, the communications software industry reacted more aggressively by focusing on providing as close to an end-to-end solution as possible. Tighter partnerships tended to be less significant, especially when compared with technology acquisitions.
The carrier community is focused on the delivery of new service offerings - including IPTV, high-value broadband, and wireless content and entertainment - while evaluating next-generation architectures such as IMS. This dynamic market helped to fuel new opportunities for back-office investments. This year continues to represent a more positive period for the communications software industry, driven in part by:
- Continued demand for next-generation services and investment in service delivery technology.
- Increased realization by carriers of the growing importance of customer centricity.
- Focus on profitability, solved in part by implementing revenue assurance programs and rationalizing customer data strategies across both network-facing and customer-facing systems.
- Increased vendor focus on providing the 'complete' solution to the carrier. In 2006, we saw leading OSS/BSS vendors continue their acquisition sprees in order to create a more comprehensive order-to-cash-to-care solution strategy for both Tier 1 and Tier 2 providers.
We expect steady growth for BSS/OSS vendors to continue as incumbent carriers maintain their focus on delivering the right services to the right customers and as greenfield operators (mostly in Africa, Eastern Europe and Asia Pacific) invest in OSS/BSS solutions. However, expect them to invest in such a way that they avoid the growing pains and mistakes that incumbent carriers have had to address.
There are also several significant BOSS trends we see in the market.
A single and central view of subscribers, their provisioned services and their interactions with network resources will gain acceptance as a better way to provide a customer-centric view of products and services. Driven in part by next-generation OSS/BSS technologies, customer interactions will be viewed as more than just a billing or call-center relationships. We expect Tier 1 carriers to place more emphasis on establishing a unified view of customers.
Service provisioning vendors will be more closely coupled with SDP offerings. Service fulfillment systems should be able to support an SDP solution, and we expect OSS technology vendors to create a tighter link between the service delivery platform and the provisioning layer. Substantial work is currently underway by TMF to align SDP solutions with fulfillment solutions. Streamlined revenue settlement, partner settlement mechanisms, revenue assurance and the ability to provide zero-touch provisioning will drive the need for investment in sophisticated BOSS products.
We expect the service assurance market to grow at an annual growth rate of 20.89%. At Yankee Group we define service assurance solutions as solutions that monitor service performance based on the customer's view and not based on the network manager's view. Based on defined KPIs, KQIs and SLAs, these solutions help service providers connect network and service performance with end-user experience.
Service assurance solutions will also need to have a profound service-management component. Service management is used to gain an understanding of where service quality for different services stands, what combinations of different service quality scenarios are possible, and which service quality scenarios deliver the greatest value to the CSPs. IT service management or ITIL (which has traditionally been looked upon as best practices methodology for IT service management) is gradually being introduced in the service-management domain.
We expect more bundled service-fulfillment and assurance offerings for IPTV, DSL and other high-value IP services. We all know that MSOs offering triple-play service bundles have also made strategic in-roads into carriers' stronghold which is the voice market by providing VoIP service as part of their bundle. No wonder CSPs are investing heavily in IPTV to complement their existing voice and data services, and compete with cable MSOs.
However, carriers face the daunting task of replicating the superior video viewing experience, which the subscribers are used to thanks to superior video service provided by cable and satellite companies. It is therefore not surprising that success of IPTV service solely depends on high-quality video viewing experience of the subscribers. Obviously it becomes critically important for any carrier looking to roll out IPTV and other NGN services to have a flexible service fulfillment and assurance strategy if the service is to be profitable and differentiated from well-established cable and satellite services.
Close coupling of BI capability with billing and OSS is becoming critical. BI and network analytics is becoming a critical component for planning, execution and optimum delivery of services by service providers and also to target the right service offers to the right customers at the right time. Analytics used effectively can catalyze customer centricity and hence enhance revenue potential for service providers. Billing and OSS vendors will continue to couple with BI suppliers through acquisition or development.
Market demand for online rating and charging platform will continue to grow. Prepaid-postpaid hybrid account structures as well as adoption of NGN architectures like IMS will push the demand for online charging systems.
Policy management, compliance management and identity management will play critical roles in NGN-based services. Next-generation architectures and IMS promise to change the dynamics of bandwidth allocation and management. Rich media content, IPTV, VoD, gaming and other next-generation services will impact IP network resources significantly. Success of next-generation architecture will be measured by seamless bandwidth management and guaranteed quality of service, and the onus is on OSS solution vendors to deliver this.
Sharing subscriber data among operators and providers is tricky because it involves security, privacy and cost. OSS and BSS vendors need to be able accommodate extra parameters related to subscriber's secure profile information and also metadata and billing parameters, which will be utilized by BSS systems during rating and charging.Ari Banerjee is program manager of enabling technologies at the Yankee Group.