From CSP to DSP – the next evolution of the service provider

Chris Newton-Smith is the chief marketing officer of Redknee. Here he tells George Malim how, as communications service providers (CSPs) transform to become digital service providers (DSPs), they are entering new markets, bundling propositions with new partners and putting significant stresses on BSS in doing so. Newton-Smith warns that a slick front end is only part of the answer; CSPs must do the hard work of connecting it with their BSS infrastructure if they want the flexibility and time to market required to compete in the digital services market.

VanillaPlus: There has been a lot of talk about the need for communication service providers to become digital service providers. What do you feel a DSP is, and have you seen evidence of this change within your CSP customer base?

Chris Newton-Smith: From Redknee’s perspective, there are several changes that we are seeing in the market due to the CSP to DSP transformation. First, within the telecoms business, CSPs are still selling minutes and data, but how they engage with their customers has changed. They engage with customers in multiple ways, including online, apps, social media, customer care and more. Today’s customer engagement expectations are being set by businesses that provide various self-service options – like Amazon and others. They deliver consistency throughout all their channels, and are focused on making it easier for customers to discover new services. CSPs are working to replicate these best practices for communicating with their subscribers.

The second set of changes we see are that some CSPs want to bundle and offer existing telecoms and new, non-telco services together. They might bundle retail energy with voice and data minutes, or offer home security with more traditional telecoms offers, while using the same provisioning or order management systems to create these new offers.

CSPs can fix up the front end by providing a better app with an easy-to-use look and feel, but they also need to do the hard work of connecting the infrastructure especially when it comes to offering new services. Our customers are moving in this direction but it’s not something everyone is doing yet. The types of new digital services we see are varied, depending on the region. There is no one common approach that I’m seeing in terms of how service providers are moving from CSP to DSP, it varies based on the CSP’s market and IT infrastructure.

VP: What types of digital services are your CSP customers supporting today?

CNS: I’m seeing some really exciting offerings, like buying and managing home energy services through a mobile phone, or services where CSPs bundle together different devices, such as offering home security features or bundling IP services on the enterprise side. Vodacom Business has created a successful offering where it is reselling enterprise services such as Microsoft Office 365 and bundling these with connectivity and IT services. Most CSPs are rolling out M2M offerings – providing the bandwidth and device management piece for M2M modules.

We have a number of customers who are providing an MVNE solution to enable new partners and brands that want to launch MVNOs. Often these brands are coming from outside the telecoms industry, and want to utilise the expertise and MVNE capabilities of a CSP to launch quickly into the market and to outsource the telecoms piece. For CSPs this can be a twist on their wholesale business, reselling billing and IT as a cloud service for MVNOs along with wholesale minutes and data. Most MVNOs today are looking at new offerings, such as retailers that are using mobile minutes and loyalty points combined with their retail offers, or integrating with banks, and other types of co-branded business models.

VP: What do you believe are some of the key challenges service providers are facing in making this transition?

CNS: Organisationally, we see that CSPs are working to simplify how they roll out new IT services and offers. Some have set up standalone business units, and some are combining IT and technology organisations to help them roll out new services. Some are looking at outsourcing with companies like Redknee and others to help them. For the larger CSPs though, the question becomes, how to advance with a disparate IT infrastructure.

Some CSPs will want to build an entirely new stack, and some CSPs are taking this approach. For the MVNE market, they typically will want to build a new stack altogether to support their MVNO clients. Whether it’s a new stack or transforming the existing IT infrastructure, it is a challenge that involves not just technology but also managing change throughout an organisation. CSPs need to ensure that they have the right partner or set of partners to make these projects successful.

VP: How are CSPs preparing to handle the billing complexity involved as they transition from being traditional CSPs to becoming digital services providers (DSPs) and what are their primary needs?

CNS: We’ve seen that CSPs are looking to simplify their software stack, and looking for their partners and suppliers to take on more of a role in executing these projects. This is a trend we are seeing more and more. They are working to simplify their offers and how they go to market, and making corresponding changes to their IT and BSS systems. CSPs need to be able to design and launch new products and services quickly, they need to be able to provide great customer service through multiple channels, and they need to do this while reducing their overall spend to improve profitability. CSPs are also looking for software solutions that are proven, well packaged and preintegrated; to minimise integration risk and enable fast time to market.

There is also a push to offer new OTT services to market, and to do this properly they need to be able to support partnerships. This requires having IT tools that allow them to bring on new partners, manage them more easily, and handle complex revenue settlement that can involve many partners in the value chain.

VP: What are the implications of multiparty – or B2B2X – business models?

CNS: The answer to this question depends on what role the CSP is playing and what the business model is. If the role of the CSP is to resell and create new offers as a channel for new B2B partner services, they need a way to manage these commercial relationships. They need to measure if they are meeting their SLAs. If they are billing on behalf of other parties, they also need to figure out who gets what from the value chain.

In some cases the CSP is acting as more as an IT enabler. In this scenario they are providing a platform where there is a common set of BSS services that they want to offer to potential IoT application developers and enterprise customers. With a CSP platform offering, the question then becomes, how do they modularise their capabilities and potentially resell them as services? How do I take my BSS infrastructure and make it easier to use? In this instance, the CSP is not selling the services themselves, but instead they are helping their customers take their services to market.

VP: With digital services, the number of services provided by CSPs will proliferate, and it will also create accelerated service lifecycles. What stresses to launch and support new digital services will this put on existing BSS?

CNS: In terms of the lifecycle of a service, a CSP needs to be able to quickly provision and set up the new digital service within its infrastructure. As a CSP, you have to be able to set the new digital service up in your product catalogue and BSS infrastructure, including linking it into your order management and provisioning systems to automate the delivery of the service. A new customer will have an expectation of near instantaneous delivery of the service and the IT infrastructure needs to be able to deliver this. And of course, a CSP also needs to be able to quickly troubleshoot if something goes wrong with the delivery of the new service.

As a service provider, I also want to communicate in a more proactive way with my customers – in real-time. I will also want to be able to promote multiple offers with promotions that mix new and existing services. Once the service is up and running, I then need a way to support the customer. They might call in to a helpdesk or they might raise a question on social media. As a CSP I need a way to support them in a way that works best for them. I need to provide an omni-channel customer service approach where the user experience is consistent across channels. This often stresses current BSS systems.

VP: A key new service area for CSPs will be IoT. How are the requirements of IoT different? Are CSPs’ current BSS fit to serve the high volume but relatively simple demands of M2M services?

CNS: For anyone providing an M2M service today, it typically requires mobile wireless access, which is supplied by the CSP. M2M is a building block of IoT applications, and the M2M business model can be a lot simpler. With M2M, the CSP needs to be able to distribute and dynamically provision SIMs as part of an application, provide 3G or 4G connectivity to these SIMs, and manage the devices, determining what’s online and what isn’t, and then aggregate the data traffic and provide a bill at the end of the day. This is a clearly defined typical M2M offering and most CSPs are in this business today. Sometimes the CSP has to modify or add to their IT stack to deliver M2M services, but it’s in-line with what they do today for voice and data.

IoT applications have different monetisation requirements, which vary a lot depending on the application and the business model. Redknee is working with a number of IoT application developers, and specifically on monetising IoT applications that have high volumes of transactions and real-time customer engagement.

VP: Finally, how would you sum up the key attributes now required of BSS to support new digital services, multi-party business models and IoT?

CNS: It really comes down to having systems in place that can provide flexibility and agility to support whatever comes down the path. The future of the IoT is still unfolding, and CSPs need to build and plan for that uncertainly in their infrastructure. In effect, they need to plan for what they don’t know. CSPs may not be able to map out the future in detail, but what they do know is that they will need to be responsive to their customers, they will need to be adaptable to market demands, and they will need to be fast. If they can get their infrastructure to support these three key www.redknee.com requirements, the rest will be a lot easier.

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