For the last decade, mobile operators have experienced diminishing returns due to market saturation, price pressure and consumer demands for increasingly complex mobile services and also the rise of over the top (OTT) competitors who are able to provide free communication services over the internet.
On one hand, the physical, network-centric world is being disrupted by software-defined, cloud-based network and on-demand micro services, which helps to optimise operational costs and brings in IT agility. On the other hand, new consumer experiences are getting defined by these internet companies, and customers are no longer content to take what they are given or accept a process because it suits the limitations of the operator’s technology platform or processes.
In response, operators must now turn to new strategies by removing complex non-relevant internal processes, organisational and technical barriers to manage growing customer expectations and bring in new services with speed and business model agility and reduced opex. Consequently, operators have found themselves facing the question of how to become Digital Service Providers (DSPs) in order to become more appealing to consumers and keep up with these digital disruptors, says Indrajit Chaudhuri, SVP, Product Management & Technology Office at Tecnotree.
Research conducted by Tecnotree amongst global operators confirms that the industry is aware that change is required to transform their businesses and stay competitive. The research revealed that 75% of respondents had noticed increased average revenue per customer (ARPU) related to digital services over the past 12 months.
The demand for digital services appears to be on the rise, with 69% of operators expecting to see an increase in digital usage. Yet it is critical that operators reinvent their service offering to benefit from this increase in usage, enhance performance and ensure that data remains in their networks.
With 89% of those surveyed feeling confident that OTT providers can deliver new products in one to six months, compared to the 30% that believe it takes a year for operators to do the same, new services will need to be rolled-out quickly by operators to ensure they do not lag behind their competitors.
Hurdles in launching new digital services
Even if the operators are not building the new digital services themselves, it always takes a long time to roll-out even partner offerings to the market through the operator’s own channels and Business Support System (BSS). Apart from the needs to offer an omni-device self-serve system for consumers, the operator’s sales agents would need to know about the new services and the pricing and offers.
As such, they need to be integrated to the sales view of any Customer Relationship Management (CRM) system that they are using. There are integration issues in making the service offering visible in a product catalogue, with configurable pricing parameters and bundling options that provision the service for a customer – such as integration to the product catalogue and order management subsystems.
Once the customer purchases or subscribes to the new digital service, then the customer info needs to be entered or updated in the CRM system as well as billing system so that bills can be generated at the end of the billing cycle for the new subscribed service on an ongoing periodic basis until the subscription ends. As such, even a very simple service with periodic subscription has complex integration efforts towards the entire BSS platform.
Traditionally, with very limited number of new services launched, the operators tried to manage it with changes in the existing BSS system. However, even if this approach has worked in the past, it has become a major hurdle for the operator to cross for roll-out of new digital services on a continuous basis.
The speed and agility required to compete and create great consumer experiences with new services mandates a very efficient and effective BSS system that has open platforms in place, which speeds up the whole order-to-cash process in order to be responsive and adaptable to these changing market demands.
Commercial migration vs. big-bang BSS replacement
Around 78% of respondents to Tecnotree’s survey plan to increase their external spend on BSS over the next 12 months, while just 36% are satisfied with the service they receive from existing BSS infrastructure providers.
Due to the inability of major operators to act quickly, OTT competitors are now gaining a large share of the market. In fact, almost half of all operators still need to update their legacy BSS infrastructure every time they want to deliver new and digital-content services to their customers.
As a result, operators will need to introduce more cost-effective strategies and efficiently update their legacy BSS infrastructures; yet so far, only 21% have installed equipment which fully integrates billing functions within their digital product set. 42% of respondents also believe an off-the-shelf BSS product (offering standardised functionality for customer management, self-care, order management, billing, revenue management and dealer channel management) would enable faster time-to-market.
With a number of digital transformation projects failing due to the need for legacy stacks to be brought into the digital age, it is important that operators simplify business processes and rationalise product catalogues effectively, while implementing architecture that is built for both agility and evolution. One way of combatting this is to commercially migrate and move your business to the new BSS stack with new digital services to start with.
Instead of trying to replace the old BSS stack completely with one-to-one feature parity in the new system, operators can succeed with lean and simplified off-the-shelf BSS solutions that enable them to launch new digital services faster, without trying to go through the complex business processes required by the telco world of services required in the past.
Nevertheless it is important for operators to understand that digital transformation cannot be achieved in just one single area. The overall performance and objective of the transformation should always be taken into consideration; even if the launching of new digital services starts with a new BSS system, eventual migration of required existing services should be planned. Together with the dawn of new technologies offering countless possibilities, operators can be prepared for the battle to win consumer minds in the new digital world with a flexible and agile BSS system and become DSPs.
The author of this blog is Indrajit Chaudhuri, SVP, Product Management & Technology Office at Tecnotree.
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