The OSS/BSS space will be transformed over the coming couple of years, as operators increasingly face up the fact that, unless they transform their back office systems, they will not be able to reap the full rewards of their investments in new RAN architectures and applications.
That recognition will boost spending on these two key areas of software, and prompt a wave of M&A. Traditional network vendors, which have usually coordinated the tools for the OSS, or network management, side of the equation want to increase their control over this profit stream, as their hardware revenues are squeezed. As they rely more heavily on software, and as carriers’ capex and opex budgets swing that way, they also want a share of the BSS segment ‘ areas such as billing which are traditionally the preserve of IT software players. Conversely, as IT and network activities converge to support a holistic view of customer experience, the suppliers of data center systems are extending their reach into the network.
This has seen M&A activity on both sides of the fence by network players like Ericsson and BSS majors like Amdocs and Oracle. And there is also consolidation among the specialists, either seeking to create sufficient scale to offer a full platform, or to make themselves more attractive to the big buyers. This week saw Aircom, which has been prominent in the voguish area of SON (self-organizing networks) being snapped up by Teoco, originally a revenue assurance specialist, but now building a far broader set of capabilities in OSS.
In 2010, Teoco bought telecoms OSS provider TTI and has been steadily expanding that firm’s range of analytics and network performance tools. Aircom will bring it additional network planning, design, optimization and performance management products for mobile operators; customers such as Zain Kuwait and ON of Brazil; and participation in the UK’s ‘5G’ R&D center, set to kick off its research at the University of Surrey next year.
Aircom will provide valuable network data for Teoco’s analytics tools, said the buyer, mirroring some of Amdocs’ purchases this year. In the past month, the billing giant has bought SON specialist Celcite and location-aware network analytics supplier Actix, whose systems will be integrated with subscriber information in more traditional Amdocs data center platforms, to add up to a complete picture of customer experience.
Teoco says its latest deal will help its customers to “address current and emerging challenges such as SON, small cells, geolocation, and the monetization of subscriber data.”
Other recent acquisitions in this space include JDS Uniphase’s purchase of Arieso, and InfoVista’s of Aexio.
These expanding players will have to face a new challenge in Europe, from Chinese billing and BSS vendor AsiaInfo-Linkage, which pledged at February’s Mobile World Congress to sign up its first European telco this year, and has delivered on that promise. It will be lead contractor for a BSS transformation project for Telenor Denmark, and will also provide the billing, CRM and real time analytics software elements of the platform.
Like many carriers, Telenor recognizes that it needs a new BSS which will be better adapted to new networks and new monetization strategies. That means a far flatter system which will reduce cost as well as being simpler and faster to respond. “The development of a new IT platform is crucial in our ongoing efforts to create a new, simpler and more efficient Telenor,’ said the Danish cellco’s CEO Marek Slacik.
Andy Tiller, VP of corporate product marketing at the company, told TotalTelecom that western carriers could learn from their Chinese counterparts, which have implemented far more simplified back office systems than the unwieldy platforms that European operators have built up, often gluing together layers of legacy applications accumulated over the years. This significantly raises their capex and maintenance costs as well as making it far more difficult to migrate to a converged system that can integrate network and IT data ‘ such as prepaid and postpaid billing and charging information ‘ to create a single picture of a customer.
Telenor thinks it is showing the way forward, replacing multiple suppliers and over 100 legacy systems with its new platform. The vendor boasts that the result will be “completely convergent. It will support fixed and mobile, voice and data, prepaid and postpaid’, integrating applications such as billing, rating, mediation, CRM, analytics and data warehousing; and adding new capabilities such as real time self-service and customer experience management.
Chinese firms often say they win deals because they can field large numbers of engineers to run complex projects and AsiaInfo already has 55 dedicated to the Telenor Denmark program, and is actively recruiting. It is vital, of course, that this project goes well, since it will be a showcase for a largely unproven supplier ‘ and indeed, for the kind of BSS transformation in which Chinese operators are leading the industry.