How Communications Service Providers can seize new business opportunities with OSS/BSS

The use of mobile broadband continues to skyrocket. The uptake

of smartphones and tablets, as well as improved mobile network

quality means that the Internet is increasingly becoming part of

our everyday lives. Traffic in mobile networks continues to grow at

an impressive rate worldwide. As per the latest Ericsson Mobility

report, approximately 40 percent of all phones sold in Q3 were

smartphones. Mobile broadband subscriptions have grown by around 55

percent year-on-year and have reached above 1.4 billion. There were

an additional 13 million LTE subscriptions in Q3 2012 as per the

report. It is projected to increase to around 55 million

subscriptions by the end of 2012 and numbers are predicted to reach

1.6 billion by 2018. This formidable growth illustrates that the

shift toward the networked society is continuing and is gaining

momentum as more and more services, as well as things get

connected. Two trends first, the embedding of mobile broadband in

things and second, the rapid uptake of smartphones, are challenging

the existing norms of the telecommunications industry in several

respects.

1. Introduction of new business models-

In the past, Communications Service Providers (CSPs) had very

simple, consumer-focused business models and offered a small set of

services. Today, communications is becoming linked to almost

everything, and the way in which both consumers and industry in

general are using communications is forcing a change in business

models. The most significant change in CSP business models is the

transition from a one-sided (consumer focused) model to a two-sided

one facing both consumers and businesses, in which the CSP is

becoming part of the business of other enterprises, such as

companies operating in the mining industry. This two-sided business

model involves a combination of retail and wholesale elements and a

scenario in which partners are also customers. Furthermore, it

means that the CSP becomes a channel for other services because it

has a relationship with nearly all of the world’s consumers

– it would be difficult to find a better opportunity for

business growth.

2. Changes in value chains- CSPs are becoming

part of the value chains for enterprises as communications begin to

be part of the services offered by these enterprises. As mentioned,

communications services are not only for connecting people, but

also for connecting things. For example, suppliers of mining

equipment have started to embed communications devices in sensory

and measurement solutions– which they in turn sell to mining

companies. Thus, CSP has become part of the value chain for mining

and processing raw materials. This means the CSP has the

opportunity to develop specific products and packages aimed at the

mining industry, enabling the latter to maximize the possibilities

offered by connecting things. The CSP may even be able to take on a

greater responsibility as an ICT provider in the mining industry.

Consumers using WCDMA- and LTE-connected smartphones can now

utilize speeds that are becoming equivalent to those available on

fixed networks. This applies especially to users located outside of

major cities. This means that many services that were formerly

available only for PCs with high speed fixed-Internet connections

are now also available on mobile devices. This in turn means the

CSP is part of the value chain for these devices – and

because it owns the consumer relationship for them, it can be an

active party, taking on the roles of channel provider and

value-adding provider in relation to what are often referred to as

over-the-top (OTT) service providers. 

Many analysts agree that, in the near future, 90 percent of the

data traffic in global networks will be video. It is thus safe to

assume that video on demand (VOD) will make up a large proportion

of this video traffic  – and that a fair share of it will be

OTT. This is already evident given the number of OTT VOD offerings

currently available, such as Voddler, Netflix, Hulu and film2home,

to name but a few. In terms of the relationship between the OTT

service provider and the CSP, the former wants to reach the

latter’s mobile-broadband subscribers, and as a result, the

CSP becomes a channel for the OTT service provider. Being a channel

means being part of the value chain and having an active role in

it. The CSP’s role is to make its subscribers and resources

available to the OTT service provider so that the latter’s

users benefit from a simpler and more predictable experience when

browsing and consuming available video content. This requires

integration between the CSP’s OSS/BSS and the systems of the

OTT service provider. This integration makes it possible for the

OTT service provider to use the CSP as a channel so that the CSP

provides value to the OTT service provider and the latter’s

users – who are also the CSP’s subscribers.

3. New go-to-market models- In the 1980s and

1990s, CSPs had a very simple go-to-market model, and even though

some mobile CSPs also used companies known as service providers (a

model that was popular in the UK), the models employed were simple.

In terms of the mining example above, it is plausible to imagine a

scenario in which the mining equipment provider and the CSP have a

partnership that enables them to serve the mining segment

efficiently. The CSP thus uses the mining-equipment provider to

enable it to target the mining segment, supplying that segment with

machine-to- machine devices. In the consumer segment of the market,

a variety of cases already exist that demonstrate how CSPs have

embedded communications functions in consumer devices. For example,

the Amazon Kindle e-book tablet includes a 3G subscription bundled

with the device. This example is especially relevant because the

Kindle user has no formal customer relationship with the CSP for

this embedded communications function. 

4. A greater variety of service offerings- CSPs

are increasing their number of offerings to target a wide range of

new users and partners. Specifically, CSPs are targeting industries

they have not served to a significant extent in the past, and

providing them with devices targeted to their needs. All of this

must be enabled by the CSPs’ OSS/BSS systems. In the examples

above, the CSP is using a basic set of communications services in

various ways to exploit the potential of the emerging networked

society. The CSP must be able to use its OSS/BSS to create and

manage a variety of offerings both to consumers and businesses.

To conclude, the business support functions within OSS/BSS play

an essential role in providing the flexibility that CSPs will need

in the future. Policy control is used to control access to various

services, create virtual networks, and control flow of traffic

through mobile, core and fixed networks. It is also used to make

sure devices and their subscriptions are utilized and receive

service according to the terms and conditions defined in the

subscription package. For example, a user whose subscription is

intended to be utilized in the mining industry should not be able

to watch videos on a tablet. Similarly, a tablet user (as in the

Kindle example above) should be isolated from the network used by

mining-industry subscribers. Finally, when a device used in the

mining industry and a Kindle are served by the same communications

infrastructure, one device should not affect the service supplied

to the other. All this is made possible with policy control.

The author is Vice President and Head of Engagement

Practices, Ericsson India 

How Communications Service Providers can seize new business opportunities with OSS/BSS