Home Asia-Pacific II 2010 Data services and revenue growth

Data services and revenue growth

by david.nunes
Issue:Asia-Pacific II 2010
Article no.:10
Topic:Data services and revenue growth
Author:Monica Ricci
Title:VP Product Management
Organisation:Intec Telecom Systems
PDF size:228KB

About author

Monica Ricci is VP Product Management for Intec Telecom Systems; she has 20 years of experience in the communications industry, 15 of which have been working with BSS vendors delivering billing solutions and consulting with service provider customers.. Monica Ricci earned a B.S. in Physics and an MBA from the University of Chicago.

Article abstract

The building network capacity, speed and quality is essential if communications service providers (CSPs) are to support new types of content and media services. To pay for this they need new revenues. The revenue-building services require real-time, integrated, systems for managing, servicing and settling with third parties in complex and sophisticated ways. CSP business support systems (BSS) infrastructure must cope with multifaceted relationship management requirements and flexible charging models with per-partner pricing in the context of increasingly varied consumer service bundles.

Full Article

Communications industry observers cannot scan the news feeds, read analyst headlines, or even flip through a business journal without finding mention of the seemingly limitless demand for bandwidth and data services. The forecasts have remained essentially unchanged during the recent economic downtown: global IP traffic will increase by 40 per cent CAGR (compound annual growth rate) over the next five years, and mobile data traffic by 120 per cent CAGR. In the same period, the associated revenue will only expand at the much lower rate of 16 per cent CAGR. The challenge will be to deal with this mismatch between the infrastructure investments required to address the demand, and the returns. These challenges extend beyond network infrastructure and include finding systems and processes for the new, multi-channel, online business model, needed to close the cost-revenue gap. What cost connectivity? Network capacity, speed and quality are essential if communications service providers (CSPs) are to support the new content and media services that their consumer and enterprise customers need. Nevertheless, the widening gap between costs and revenue compels the CSP to consider new business models that incorporate channels and revenue sources beyond the historical service provider-to-consumer chain. To make these new channels profitable, the CSP’s business support systems (BSS) infrastructure must cope with expanded requirements for creating, servicing and settling with third parties in ways more complex than those with which they are accustomed. When considering future revenues, a CSP must first decide where and how to compete. Will it focus primarily on network access and basic communications services or attempt to provide a broader spectrum of services from real-time collaboration to increasingly personalised multi-media solutions? The latter requires a focus in areas unfamiliar to the traditional CSP’s operations staff, including content licensing, programming, packaging and distribution – processes that are difficult to support efficiently with legacy systems. Competitive, value-based data offerings increasingly include partner content delivered through the CSP’s channel that includes digital content, application services, and advertising. As third parties join the CSP ecosystem, the CSP must deal with: • complex relationship management, with volume-based commitments, service level agreements, revenue-share pricing models, rapid settlement and end-to-end recourse models, including pay to third parties when paid by the end consumer; and • flexible charging models, including the expansion of subscription-based models to include digital content – moving away from pay-per-click or pay-per-download. More importantly, these charging models allow the CSP to manage per-partner pricing as a cost while creating consumer bundles that deliver content and applications from a variety of sources to create increased value for the customer and to stimulate spend and retention. These new business models, from both the consumer and the partner perspective, have an increasingly real-time focus. Real-time service management is not new; it’s been a long-standing feature of the wireless industry and has played a significant part in the adoption of wireless services over the past two decades. Until now, however, the CSP usually could sustain real-time services in a silo, constraining investment to the network where real-time was critical and keeping separate systems to support product management, customer service, and billing and payments in a catch-up, off-line, mode. Next generation service convergence A next-generation convergent architecture enables the management of all consumers in exactly the same way, regardless of access method, product type, service profile or payment method. Further, this architecture extends the same degree of management and breadth of financial options to other parties within the CSP’s ecosystem. The enabler of these new, increasingly diverse business models is a unified BSS, employing a single data model, single product catalogue, single database, and single rating engine, with a single interface for all customer management, regardless of subscriber type. In order to provide their customers with a range of advanced services and to exercise some control over network usage, CSPs need to be able to – in real-time – identify the customer, verify whether they are authorized to access and use certain types of services and whether they have funds to pay. Such processes call for real-time charging and balance management, as well as sophisticated policy control and enforcement; they may need to apply deep packet inspection and packet control technique. This new BSS must incorporate the characteristics historically associated with IN-based (intelligent network-based) prepaid service control. This requires low latency, solid reliability, with high availability while, at the same time, sustaining the traditional BSS roles of providing fulfilment, service delivery and management, and financial processing. Pushing these business functions into the network layer, simply to take advantage of a long legacy of real-time architectures, would do them a disservice, and distract the network from its critical function of carrier-grade service delivery. Instead, the BSS is better suited to adopt its traditional business functions to handling the expanding number of players in the ecosystem on-line. This means integrating new on-line BSS functions with service delivery environments and policy control, as well as legacy infrastructures, to ensure seamless service management, while simultaneously offering a smooth migration from legacy circuit switched to next-generation packet-based services. The single view Customer-centric systems within the new CSP ecosystem are only achievable when the BSS architecture supports end-to-end business processes in real-time. For example, without a single, unified, data model, the CSP must continue to map different entities in different BSS systems when making any change or rolling out any new service or offer. The time and resources required for this task, as well as the inherent risks, extend beyond the initial set-up to dealing with errors and re-work. Sometimes CSPs simply find it too difficult to truly integrate their customer management system(s) with their billing system(s), thus creating inevitable customer service disconnects. A single product catalogue means that a product needs only to be created once, and then offered to all subscribers as desired, minimising time to revenue. A single billing and customer management database means that customer queries can be answered with absolute certainty that information is current, thus reducing customer dissatisfaction, rework and refunds. A single rating engine allows a CSP to offer its rate plans to all customers, regardless of payment or service type, enabling them to attract new prepaid customers with post-paid type offers, and to switch prepaid customers across to post-paid contracts with ease. A single balance management function ensures a common approach to credit management for prepaid and post-paid subscribers, which, at a time when a single content transaction can be worth a hundred voice calls, provides greatly enhanced revenue assurance processes. Managing next-generation service complexity The future for CSPs, with the new market models and commercial developments, is exciting, but it will present considerably more complexity in terms of sustainable revenue growth, product lifecycle management, cost-control, marketing and channel development. These developments point to the need for an imaginative and comprehensive re-assessment of the types of processes required to manage all elements of BSS, regardless of whether they are wholesale or retail, prepaid or post-paid, voice or data. In much the same way as prepaid and post-paid services have traditionally been addressed using separate subscriber management processes, so too have interconnect billing and revenue settlement processes been regarded as separate from retail customer care and billing processes. To support future business models, a more holistic approach is required to integrate BSS. As the association between next-generation services and real-time process management strengthens, so too the requirement to effectively and seamlessly integrate BSS functions becomes a critical component both for next-generation revenue management and for commercial success for CSPs.

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