Open BSS will ensure digital transformation achieves a profitable outcome
The global mobile operator community remains on a path towards digital transformation. The availability of 5G is accelerating the journey as operators look to harness technology innovation to accelerate ROI on heavy 5G investments.
This is increasingly throwing BSS into the spotlight, or more specifically, the ongoing emergence and establishment of open BSS. Mobile data revenues remain a vital element of mobile operator income, Niall Norton, CEO, Openet. Mobile data revenue is set to grow at an annual rate of 7% to exceed $600 billion (€538 billion) by 2020, according to Pyramid Research. It is vital that operators not only look to protect this income, but also grow it through the creation and launching of new services.
With the rising cost of 5G infrastructure and spectrum, there is pressure to reduce the cost of service delivery, reduce time to market for new services and effectively monetise new services once launched. This market reality has turned the traditional BSS world on its head.
It has almost completely abandoned its traditional roots in vendor specific, proprietary hardware (closed BSS stacks) – an approach that in almost all cases, suited the vendors far more than their operator customers. Instead, the BSS industry is embracing a new era of flexibility, agility and openness as it offers new ways to offer service monetisation, based on opensource software, leveraging the public cloud, rapidly and extremely cost effectively.
The perfect illustration of a changing BSS world is to look at Ericsson. It was recently forced to spend SEK 6.1billion (approx. £530million) to restructure its BSS business This was symptomatic of operators turning away from so-called ‘vendor lock-in’ and a reluctance to spend hundreds of millions of dollars by embarking on wholesale rip and replace proprietary BSS projects.
These projects tend to last 2-3 years. Given the amount of change operators have faced over the last 2 years, it’s inconceivable any vendor can realistically plot that far ahead and deliver futureproof technology. Ericsson restructured because it realised it had to change. It was an expensive lesson but given the OSS/BSS market is expected to be worth $50 billion (€44 billion) by 2024 (source: Global Market Insights), it was a risk worth taking.
The emerging approach to BSS is simple – launch new offers and services through systems that best suit the operators’ requirements. In some cases this can be replacement of old legacy systems for individual BSS functions (e.g. charging, policy, billing, CRM). Increasingly we’re seeing the success of an adjunct systems approach. The best example of this is putting a real-time charging system in front of a legacy billing system. This cost-effective approach is relatively low risk and it leverages legacy systems by letting them do what they were designed to do (e.g. produce bills).
However, it also but proves operators can move with the times in the eyes of their customers and provide all the real-time offers / alerts / controls and management that customers are increasingly expecting to be part and parcel of any digital service. When it comes to customer expectation around service availability, the likes of Facebook, Google, Amazon and Netflix have set the bar.
If operators are to effectively meet these expectations, they need to learn similar lessons and emulate the core behaviours that promote engagement. These lessons most notably include being more impulsive, adopting a fail fast mentality, that sees operators move faster, both in terms of decision making and technology interoperability.
These are precisely the values that open BSS is built on. This new way of working harnesses the capabilities of new technologies and approaches such as AI, microservices and DevOps. These approaches will be key to developing the platform-based tools and services that operators will need to deploy new offers rapidly and monetise new services such as 5G and IoT. Operators and vendors have their work cut out to make change a reality, but it’s by learning from the failures of others, and embracing new thinking and new tools that the industry will truly change.
Operators that are on the path towards digital transformation journey must do all they can to maximise revenue. Adopting open, digital BSS is simply the only way this can be achieved if operators are to meet customer expectations and preserve profitability.
The author of this blog is Niall Norton, CEO, Openet