A Case for Cloud Based SaaS Billing for Telecom Operators

Managing telecom operations is a complex endeavor as it involves managing many layers of complex systems designed to deal with business issues, technology equipment, and customer management. Besides, a telecom operator has to deal with retail customers, wholesale customers, resellers, partners, employees, contractors, installers and a myriad of equipment and service suppliers.

Despite all this complexity, anyone who runs a major telecom service operation will tell you that managing billing is one of the most challenging aspects of selling telecom products and services. After all, you want to manage your collection of revenue first.

In my earlier post, I explained that it is easy to build highly scalable OpenStack based cloud infrastructure and create secure multi-tenant SaaS solution (http://goo.gl/YwE9wH). Now in this article, I discuss how cloud services are impacting billing in Telecom vendors.

Understanding of the Current OSS/BSS Deployment

All major operators deploy complex Operations Support Systems (OSS)/ Business Support Systems (BSS) infrastructure to manage their network operations.

Both systems can be seen as inter-connected pieces that combine to manage network services, monitor system behavior, provision subscribers, monitor service usage and finally bill according to a subscriber’s usage of the services in line with their service plans.

In short, Operating Support Systems (OSS) is primarily about provisioning and managing services, and network elements to assure network performance. They help operators plan, build and optimize their network. Business Support Systems (BSS) enable operators to manage accounts and payments, customer support, and service modification.

When you as a consumer, buy a new calling plan or add any service for your devices, top up your pre-paid account, pay your monthly bills, buy and activate a new device, check your data consumption, or raise a question to customer care you are using the BSS. A call center employee trained in BSS is helping your enquiry.

When a change order is completed, a series of events are triggered to make sure the network is ready to provide you services that you paid for.

Unprecedented Growth in Subscribers Base and Services

Proliferation of smart phones and numerous mobile applications has meant unprecedented growth in the number of subscribers. This has resulted in significant demand in the capacity of network providers. To meet this capacity, the operators have responded by deploying new 4G technologies such LTE and VoLTE adding new network capacities everywhere.

However, this increasing network capacity cannot be delivered simply by adding new network nodes in the network. The operators’ OSS/BSS systems need to keep pace with the network expansion. An OSS / BSS carrier class billing solution is required to support millions of simultaneous transactions. Hence, any change is a major event.

The telecom operators need to ensure that they are able to handle customer requests in a timely manner to avoid subscriber churn. Some of the main challenges faced by operators are:

  • Outdated Software with legacy procedures that do not scale well.
  • High Volume of customer transactions
  • Increased Regulation of Telecom Services
  • Competition with existing and new service providers
  • Margin pressures due to new technologies such Google, Whatsapp, Instagram, viber, skype etc.

Enter Cloud Computing & SaaS Billing Solutions

The OSS/BSS vendors were able to read the trend set by software companies such as Intuit QuickBooks started offering cloud based solutions to small businesses. If that model worked well for small and medium businesses, it was just the matter of time someone was going to offer Cloud based solution for operator billing as well. That is exactly what is happening in the last few years. A number of vendors Zuora, Comverse, Amdocs, Metrotech (now part of Erricsson,), Comverse etc., decide to offer cloud based billing solutions.

As I mentioned in my other blog; the cloud computing presents some interesting opportunities as well as some intricate challenges. While traditional BSS/OSS is a resource-consuming necessity with expensive infrastructure for telecom service providers, it can still be scary to consider a SaaS delivery model. However, this need not be the case. By analyzing their requirements and aligning with the service offering from SaaS billing providers, this can be a winner for operators.

Cloud SaaS model Billing Enables Quick Deployment

SaaS billing models enable operators to quickly support new services, enable the convergence of multiple systems or enter new markets. SaaS based billing is recommended for its ability to help operators get into a new business quickly and bring something to market more economically without having to build the infrastructure to support it.

SaaS Reduces the Capex with Low Barrier to Try

One of the biggest motivations for all to move cloud based SaaS operations is to reduce the initial capital cost. SaaS has the potential to reduce both license fees and integration efforts for service providers.

As a multi-tenant solution deployed in the cloud, enabling delivery of carrier class billing, a SaaS billing is a pay-as-you-go solution so the cost to try a solution is low. This opens new opportunities both for existing and new service providers to manage complex billing of recurring revenue services.

However, it is important to select a vendor for telecom billing SaaS solution from a partner who is willing and able to meet your business needs, offer flexibility and customization, and back the solution up with a Service Level Agreement (SLA). Service providers owe it to themselves to examine the SaaS model as part of their due diligence when planning for BSS/OSS investments.

Service Matrix for Cloud SaaS Billing solution

Typical services included in the SaaS billing solutions are given below. This is not an exhaustive list:

1. Create and Manage Create Services Catalogs

Every service operator offers an extensive set of services. As a service provider, it should be able to create its service catalog to create new product offerings. It should be able to define complex services that leverage multiple services from multiple service units, partners or business units.

2. Automate Order to Activation

This is obvious need that you need a system that automates the process from ordering to activation. Automating the provisioning of services ordered creates process efficiencies and customer satisfaction.

3. Measure Service Usages

Manage service usage and notify customers of usage for overages, or approach to overages, as well as, provide rating of usage outside of service plans.

4. Manage Customer Billing

Automating billing and payment ensures billing accuracy while controlling accounts receivable. Integration with Tax engines to manage complex taxes such as telecom taxation etc is critical as well.

5. CRM Integration & Service Orchestration

Integration with CRM and ERP, as well as, integration with upstream providers and partners is very important. Provisioning automation is the first step toward orchestration of work flow process between these systems. Telecom operators have many complex processes through which services are activated, measured, invoiced and de-activated or upgraded.

6. Cost Reconciliation

Measuring costs against revenue at the product and account level provides data for optimizing margins. Distribute costs and revenue between service providers and partners.

Cloud SaaS versus Custom Deployment Comparisons

There is no one solution will fit everyone’s needs. We can define operators such as:

  • Large Operators (L): USD 10+ Billions revenue, Often Multinational operation, 100K+ employees
  • Midsize Operators (M): USD 1-10 Billion revenue, MNC/ domestic, 10K to 100K employees
  • Smaller Size Operators (S): Less than USD $1B, Domestic, Employees < 10K
Features Cloud SaaS Traditional Deployed Operator Size Impact
Security, Control, Customization, Scale Very High Capability to Scale

Winner: SaaS

Low Support for Customization and Quick Scaling is difficult All but L, M need a lot of customization.
Time to Deploy, ease of Running and Maintenance Support and Run SaaS model is quick to deploy.

Winner: Hard to Say

Traditional model is easy to run, but takes time to deploy

Winner: Hard to say

Functionality, Agility and Compatibility with Existing software Software dependent.

Winner: Hard to Say

Solution dependent

Winner: Hard to Say

Cost Impact SaaS Cheaper Initially.

Long term cost subjective.

Winner: Hard to Say

Expensive Capex.

Long term cost subjective.

Winner: Hard to Say

All but small operators are very cost sensitive.

I have provided the overview of modern OSS/BSS that enable the operator services. Cloud based SaaS solutions are now being evaluated by many operators.

For individual consulting on OSS/BSS, please contact me privately at my email.

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