In the coming year, telcos and managed service providers will continue the ongoing trend of looking to improve existing revenue streams and finding new sources of income. At the same time, new innovations to OSS and BSS systems, including automation and artificial intelligence, will help service providers improve their operational efficiency and reduce operating costs.
#1: More SMS traffic
In recent years, SMS traffic has lost significant traction to WhatsApp and other messaging applications for personal messaging. However, the use of SMS has gradually made a comeback in the enterprise segment. Today, businesses are actively using SMSs to send alerts, notifications, confirmations and marketing messages to customers for which smartphone-based messaging applications cannot support. Through application-to-person (A2P) platforms, enterprises are also using SMS as an essential part of customer identification and authentication processes.
SMS traffic will certainly continue to grow into the near future and represents an opportunity for mobile operators to offset declining revenues from voice-based services. For mobile operators to successfully turn increased SMS traffic into significant revenue streams, they must build and maintain business processes and operational frameworks for managing pricing, routing, rating and billing in a similar capacity as they do for their interconnect voice business.
#2: More VAS services for enterprise customers
Most telcos and managed service providers will continue to expand their portfolios of value added services (VAS) that they offer their enterprise customers. As time passes, like most telecommunications services, core connectivity services have been commoditized and there is ongoing need for service providers to generate new sources of revenue.
In recent years, many service providers have invested in building the network infrastructure to support the rollout of NFV services targeted at enterprise customers. In 2018, service providers around the world are expected to begin wide scale commercial launches of these virtualized IT services.
In parallel, service providers are looking to the area of unified communications (UC) to offer new VAS services. We see an increasing number of service providers hosting PBX systems and call center systems and offering services to their enterprise customers based on these systems. For the enterprise customers, moving to such services can reduce costs and increase communication flexibility.
#3: Broken OTT disruption
OTT players and their voice-over-data services have clearly disrupted the business models for voice-based communications services over the past decade. Messaging applications for both personal and business users have over time eroded the revenue streams from voice-based services that previously were cash cows. Examples include international and long distance dialing as well as roaming fees.
There is certainly nothing wrong with market disruption and changing business models. However, the problem here is that the OTT players completely disrupted existing business models without building up alternative models that are viable over the long term. For example, in the travel segment, international calling and messaging has moved from traditional voice and SMS services to free Internet-based OTT services. To get this market segment back, telcos will be required to provision of free-of-charge services.
#4: Better fraud detection
Telcos around the world, regardless of size or location, are generally using outdated tools and practices to combat fraud. As surprising as it may sound, most telcos still use manual processes to identify fraud and rely on ad hoc processes covering multiple departments to block fraudulent traffic.
At a recent telecommunications conference in London, a CIO at a prominent European telco boasted about being able to detect and block fraud within a few hours. This is actually nothing to brag about. Today’s fraudsters are using highly sophisticated technologies and methods and within a couple of hours can complete an attack and inflict serious financial damage on a telco even before its fraud prevention team is aware of what happened.
Thankfully, there are signs that this situation is changing. To begin with, technologies that have been used in the IT security space for many years are being successfully applied to combat telecommunications fraud. For example, anomaly detection is now being used in the telecoms space to baseline communications patterns and traffic on telecommunications networks and monitor for abnormal network traffic in real-time. This approach positions a telco to identify fraud much more quickly than is possible today. Taking this a step further, workflow processes can be implemented to block fraudulent communications automatically. We expect that this entire process to identify and block fraudulent traffic can be reduced to a matter of minutes and possibly even seconds.
#5: Automated OSS and BSS processes
Competitive pressures and lowering margins are constantly forcing telcos to maintain efficient operations. Clearly, automated processes can reduce costs by removing cumbersome manual inputs and lowering the amount of staff required to support operations. The process for automating fraud protection is just one example. Another example is the automated management of voice and SMS network traffic in order to optimize the costs associated with the provisioning of these services. Process automation, including the use of artificial intelligence, is nothing new, although going forward it will have growing importance for all telcos in all areas of OSS and BSS systems and processes.
About The Author:
Arnd Baranowski is the CEO of Oculeus, a leading provider of innovative OSS/BSS solutions for telecommunications companies and mobile operators worldwide. Arnd has over 30 years technical and software development experience, initially in the military and then a successful track record of developing database solutions for Commercial and Telecom applications.