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BSS transformation: Key to new monetisation opportunities

By December 5, 2018 No Comments

Each year, telecoms.com runs a survey that checks the pulse of the industry. Like all good surveys it’s anonymous, so people respond candidly and honestly. This year over 1500 telecoms professionals were asked their views on a range of topics from 5G to cloud to digital transformation.

In this years’ survey, one of the questions looked at revenue from digital services. It asked ‘what percentage of operators’ revenue will come from services enabled by digital transformation?’ The results were that in 2019 operators will generate $294 billion from digital services. By 2022, this figure will rise to $464 billion p.a. That’s a lot of new revenue in a short space of time. The pressure will be on IT teams in operators, and in turn their BSS vendors, to enable monetisation and management of these new services.

One of the questions in the survey looked at how far operators were down the road in their digital journeys. In the area of OSS/BSS refresh in 2019, they anticipated being 36% of the way there and by 2022, they would be 53% along the road. Anyone who knows the complexity and numbers of systems involved in any operator’s OSS and BSS stacks will agree that this advance in such a short space of time represents a significant achievement.

Then there’s the question of legacy systems. Operators have a lot of legacy systems. I once remember an operator who had over 100 separate billing systems. Enter into the IT department of some operators and you will see some systems that date back to the 1980s. These have been modified many times in their lifespan adding to the complexity. Upgrading legacy systems to cater for digitalisation can be a nightmare. So in attempt to find out more about this the survey asked ‘what are the most sensible approaches to upgrade / replace legacy systems?’

There’s been a lot of headlines about large scale billing transformation projects failing. It was no surprise to that a ‘big bang’ approach was voted the worst (by far). This approach involves swapping out legacy systems for digital systems in one large project. Next, there was a tie for second place. A greenfield approach to digitalisation of systems scored well. This is where operators add new digital systems to support new lines of business, e.g. IoT, 2nd brand, etc. In joint second place was the add-on system approach. Here, operators add new digital systems as an overlay to existing legacy systems and phase out legacy over time. The most popular way to upgrade legacy systems was the phased approach. This involves step-by-step approach replacing legacy solutions with digital solutions (e.g. replacing an old billing system with a real-time digital charging system).

It seems that a more pragmatic approach to BSS transformation is being favoured. Large scale transformations are just too expensive and risky, plus they have a pretty poor track record. One other approach that we’re seeing, especially with large operators, is a co-development of a new Digital BSS stack. This involves the vendor and the operators’ IT teams working together using a library of Digital BSS microservices and collaborative DevOps.

These pragmatic approaches to BSS transformation are now possible because of the changes in the underlying technology. Add in how systems are developed and deployed and we’re seeing real change. Open Digital APIs, which enable much better (and cost effective) interoperability between systems, are now being used in carrier grade Digital BSS production systems. Providing systems on cloud and hybrid cloud can take a lot of the internal IT capex costs out of the picture and the increasing use of Open Source can also impact costs. I wrote about this back in June this year in an article for telecoms.com. In the several short months since, there has been a great deal of progress. BSS stacks used to be a closed shop managed by large NEPs and IT companies. Not anymore. Advances like the TMF’s Open Digital Architecture are welcome as they provide a blueprint for Digital BSS. One that is based on open-ness, real-time and is customer focused – and is designed for the digital economy.