The new spectrum of Growth

From billing solutions to big data, IT applications are helping telecom operators find new sources of revenue and enhance customer experience

By KTP Radhika

The Indian telecom sector has witnessed phenomenal growth during the past few years. Currently, India has the second largest telecom network in the world, the largest being that of China. According to subscription data by the Telecom Regulatory Authority of India (TRAI), India has over 90 crore telephone subscribers as of May 2013. Our mobile or wireless subscriber base is currently 87 crore. As per the records of Department of Telecommunication (DoT), Government of India, India’s overall tele-density is 73.34%.

The highly competitive sector has at least seven telcos operating in each circle and up to 12 telcos in some circles competing for market share. That makes India one of the most crowded mobile markets globally.

In the past few years, the sector has seen fast growth. To be precise, the sector grew at a CAGR of 20% in the four years to 2013. Despite the fact that the sector witnessed a shakeout in the wake of the 2G spectrum allocation scam and that the deployment of 3G and 4G has been on a low ebb, India is still expected to see an increase in terms of data-intensive mobile services.

The telcos are also optimistic, they have invested significant sums in the broadband wireless access and similar services. According to DoT, India has 14.98 million broadband connections as of December 2012. The high competition in the sector has led to aggressive pricing during the last two years. Operators who are stressed on margins are exploring new ways to enhance revenues. With revenues from voice services stagnating, companies realize that future growth is likely to be driven by wireless data services. Further, service providers are increasingly getting dependent on revenues from mobile value added services(VAS) for higher profitability. A joint report by Wipro Technologies and Internet and Mobile Association of India (IAMAI) states that
mobile VAS market is expected to reach $9.5 billion in 2015 from $4.9 billion in 2012.

Today, operators are focusing on enhancing quality and customer experience management with new service offerings. They are creating a differentiated portfolio to understand customer sentiment, improve customer experience and find revenue sources beyond voice calls. They also seek new ways and solutions to come up with new service offerings, monitor network usage better and unify the internal process and service customers in a better way. This has led to a greater demand for efficient technologies. Telcos have started to employ newer and advanced systems in key areas like billing, customer management, network management, operations support system(OSS) and so on. Advanced IT solutions like business intelligence and big data analytics are helping them in better understanding of new business areas.

Billing backbone
Billing has become the one of the most complex tasks for the telcos. For an accurate billing process, a service provider has to navigate through dozens of billing applications, customer information systems and financial applications. Various services, payment methods, and customer groups are adding to this complexity.

“Traditionally the billing process has had clear demarcation in terms of pre-paid (which is real time rating) and post paid (which is charging once in a month) with possibility of complex tariff and discount structures. Accordingly, most of the telcos have had two separate platforms,” says Vishant Vora, Director –Technology, Vodafone India. Today, subscribers are moving away from legacy ‘money’ accounts to ‘volume’-based accounts for billing or charging of data usage. This has resulted in an influx of data products and packs which predominantly bill the subscriber on the basis of volume in MBs and GBs.

Complexity, rigidity and cost of multiple legacy billing systems was a big challenge for telcos till recent times. However, to meet the diversified needs in billing, the vendor community has come up with matured billing solutions. Today, powerful new billing solutions have become more agile, simpler and cost-effective. Billing interfaces are becoming more open and a lot of convergence is happening in this space. Modern billing solutions are providing real-time billing, maintaining complete audit trails of all billing activities, supporting a wide range of payment methods and are providing flexible ways to manage customer acquisition retention operations. Rajesh Rampal, Head – IT, Aircel explains, “A lot of convergence is happening in this space and we can see prepaid charging and postpaid billing getting merged into one system.” That in turn, is helping telcos to offer more flexible billing plans which are part pre-paid and part post paid in nature. Billing solutions are also being integrated with business critical systems such as CRM and ERP to provide competitive advantage for service providers.

By consolidating rating systems and automating tasks, new age billing solutions are helping telcos in accelerating time to market for new services. Convergent and real-time billing enables them to become more customer centric and helps them to implement next-generation strategies and business model. Advancements in the systems are also helping minimize invoice production. Sumit Chauhan, Vice President & GM, Embedded & Telecom BU, Symphony Teleca Corp, a software provider for the mobile communications industry, says, “Billing solutions have started becoming more and more agnostic to network, technology and hardware to keep it simple for customers. Utilizing billing channel for marketing has opened up significant leads for telcos to sustain and grow the business.”

Oracle Billing and Revenue Management solution, Amdocs Billing, Comverse Kenan FX, SAP Billing for Telecommunication, Convergys billing system, etc., are some of the leading billing solutions widely used by the telcos.

Telcos are also using home grown solutions for their billing purposes. For example, MTS India, the mobile telecom service brand of Sistema Shyam TeleServices (SSTL), is using Telecompass- a comprehensive billing system for the past six years. Developed by the IT team of SSTL, Telecompass is used for the MTS’s billing, CRM, distribution management network, inventory management and trouble ticketing purposes. It also does some parts of sales force lead management too.

Rajeev Batra, CIO at MTS India states, “Since we have developed it ON our own, it is very much aligned to our business process including the white-label data services we provide outside. It provides great flexibility in terms of integration with other IT systems. Telecompass is a unified convergent system so that we can get the voice and data bills together and can give updates to our CRM on a real time basis. Over the years, we have changed its architecture significantly and have developed it into a much more advanced system to accommodate our larger footprint customers.” Telecompass also helps to integrate various products and services of MTS.

OSS, revenue and lifecycle management
Competition among telcos is bringing in new growth prospects for operation support systems and business support systems (OSS/BSS). Initially, telcos were using in-house developed software for these services. But with the emergence of new generation services and rise in customer base, the scope of operations has multiplied manifolds. This in turn has allowed telcos to focus on their core services and outsource the others. “BSS/OSS still remain the core and is the most essential requirement for a telecom company. Nowadays, OSS/BSS systems are getting more complex and advanced and are easing telcos in servicing customers,” says Batra of MTS.

Today, innovative solutions are coming up in this space with vendors offering customized OSS/BSS with more flexibility to expand the capacity and accommodate various business operations. Says Chauhan of Symphony, “Currently, OSS/BSS systems are having SOA architecture and are more focused towards managing the network and services efficiently.

However, there is an increasing demand to transform the OSS stack to manage better customer experiences by having customer focused systems presenting real-time and event-driven view to customers. In order to achieve this, telecom providers are moving towards industry standard commercial off-the-shelf (COTS) products for their fulfillment, assurance and billing applications rather than building or customizing the in-house legacy applications.”
Revenue management is another key area and a competitive differentiator for telcos. With its broad business processes, revenue management impacts the way telcos introduce new products and services, manage customer accounts, balances, payments and revenue integrity. However, service providers were using multiple software systems within their revenue management environment till now. A key reason for this is that no single platform could deliver a complete revenue management solution for all types of customers, services, and payment methods.

Consolidation and convergence have happened in this area too. Assures Namit Sinha, Senior Sales Director, Technology, Oracle India, “Convergent solutions are available for revenue management these days. For instance, Oracle’s Communications Convergent Charging solution (consisting of network charging & control and billing & revenue management) will help telcos to provide support for their entire service offering. The solution provides a comprehensive and configurable platform, which seamlessly integrates online and offline, real-time and batch charging processes while maintaining a unified data model for all subscribers and services.” Vendors are also offering hosted solutions for OSS/BSS and revenue management. For example, TCS’ hosted OSS/BSS revenue management system (RMS) supports the needs of revenue management across multiple payment methods and business models.

Another focus area is lifecycle management solution. Apart from providing visibility and cost efficiency, lifecycle management enhances current processes and systems, allows greater functionality and enhances customer service. “Disciplined usage of these tools has led to structural and manageable changes in all our products and applications and has even helped in reducing the business down times attributed to changes,” claims Rampal. Aircel is using tools like HPSM for service and change management, CVS for configuration management and Siebel CRM for subscriber lifecycle management

Big data opportunities
Telecom operators capture trillions of bytes of unstructured information about their customers, suppliers, and operations. Nokia Siemens Networks’ MBit Index study reveals that data traffic on mobile networks generated by both 2G and 3G services grew about 92% last year. For telecom operators, analyzing these diverse and unformatted digital data streams can reveal new sources of revenue and provide fresh insights into customer behavior. Here the spectrum of big data and analytics comes into play.

“Big data offers opportunities to gain cross channel insights by analyzing transactional data at each level of engagement with the customer. Additionally, operators can find new sources of revenue by collecting and analyzing location data to determine target segments and product profitability margins, prior to offer conceptualization,” analyzes Sinha. This would help improve efficacy of marketing and advertising spends. In billing, big data analytics has started playing a major role in utilizing data effectively, improving revenue assurance as well as customer retention for the telcos by better understanding customer behavior patterns.

Big data-based solutions bring together lines of business and various disparate data streams under one umbrella thus providing a total view to arrive at customer lifetime value (CLV). These solutions also help in realizing synergies among sales and marketing and customer relationship management. The integrated view makes it possible to analyze the customer life cycle, including tasks such as customer identification, acquisition, relationship management, retention and customer value enhancement instantaneously.

In the highly competitive Indian telecom industry, providing customized and personalized offerings to customers is key and critical to growth and profitability. Network analysis can also be used to offer personalized promotions to customers based on their usage. Mirroring this view Rajesh Janey, President, India & SAARC, EMC says, “Big data can be used to promote customer loyalty and cut churn, predict demand and allow businesses to better target their upselling and cross-promotional activities. With big data analytics, in future, telcos will have the opportunity to deliver sharp insights on consumer preferences and needs to other sectors like retail, BFSI, media & entertainment and even government among others.”

That said, analyzing the ‘right data’ is the key thing in generating true insights and creating real value, feels Vipul Jain, Head of Customer Experience Management and OSS Sales Development, India, Nokia Siemens Networks. “This makes the analytics solution leaner and more efficient, generating true real-time insight with the right level of effort and investments from the operator.”

Monitoring the network
Telecom networks are complex, dynamic and expensive assets that need to be actively managed to optimize capacity utilization. With security being the centerpiece of the network, network monitoring and managing has become more important than ever. “Network and data security is a key part that has been important and has now transformed to a new level with the explosion of OS platforms on mobile devices,” says Bala Mahadevan, CEO, Orange Business Services.

Data usage is exponentially expanding, so is the demand for bandwidth. This demand along with expectations of uninterrupted services is driving the network monitoring solutions to the next level. Describes Sinha, “Network intelligence solutions are designed to reduce capex and opex and drive maximum efficiencies from the network. It helps telcos to optimize capacity utilization by rerouting all, or part, of a network more efficiently to free up capacity that can be used elsewhere.” It also predicts network resource exhaustion in a timely manner by identifying likely capacity stress points in a network. “Solutions on network, service and customer experience management are crucial weapons on the operator’s arsenal to build and provide great experiences to subscribers and a compelling service offer. And by providing those, operators can effectively differentiate in the market and drive customer loyalty,” assures NSN’s Jain.

Managing VAS
According to research reports, more than half of the overall incremental wireless revenues by 2015 is expected to come from non-voice services. As such, operators need to offset the anticipated decline in voice service related revenue by offering new and innovative value-added services (VAS) to increase average revenue per user (ARPU). The Acquisition and Retention study by NSN has revealed that more than 18% of users are willing to spend extra for special services. This highlights the need for platforms targeted towards VAS. “Telecommunications industry today is increasingly adopting customer experience management solutions, analytics solutions and social media tools in order to better understand the customers, their needs and thus provide them with better quality and customized offerings,” tells Hemant Malik, CTO, Service Providers business, Juniper Networks.

Vodafone’s Vora points out, “We see the theme of convergence playing out in its full potential in the area of traditional VAS. Due to higher degree of IPfication and availability of better cloud based models, now it is possible to deliver traditional content or communication oriented VAS from a single unified platform.” As a result, there is a shift from a specialized dedicated platform for a category of VAS to unified service delivery platforms that includes traditional VAS. Meanwhile, certain new category of VAS would continue to require dedicated platforms of their own due to either special technology involved like machine to machine(M2M) or regulatory requirements like m-commerce.

The next level

With such new services and developments, IT is fast becoming the life blood of day-to-day operations in telecom. Even then, service providers are still facing challenges in managing information technology and gleaning right benefits out of it. Application integration and maintenance is one of the major problems for telcos. Sanchit Vir Gogia, Founder & Group CEO, Greyhound Knowledge Group feels that telcos have to look beyond outsourcing. “Telcos have done a good job in networking. However, they are weak on the IT infrastructure side. Infrastructure is critical and fundamentally important in delivering cloud services. They also have to go beyond IT outsourcing,” he says.

Another pain point is getting the right manpower for managing IT. “Getting the right manpower to support multiple technology at both data centers and circle offices is still a challenge,” admits Vora.

All said and done, industry experts affirm that better IT solutions will continue to be the key differentiator in servicing customers, achieving competitiveness and grabbing more market share for telcos in the coming days. Accordingly, solutions will also evolve to meet the ever-changing needs of the sector. For example, customer relationship management solutions would be converted into customer experience which would need transforming CRM, customer touch points and associated business processes. Likewise, integrated solutions or unified platforms will help telcos to move to the next level of growth. Here, what a company has to focus is to select the right technology options and combination to deliver superior customer experience.