OSS BSS World Presentation – Telco trends and their impact on IT Jean-Marc Steffann Sep 2011 Introduction Challenges Role of BSS/OSS Rapid growth of mobile data consumption has seen mobile broadband reaching high penetration levels in developed countries Internet penetration in developed countries has grown rapidly to more than double the global average (29%) Mobile broadband in developed countries has seen faster uptake than fixed in the last five years HH Internet Penetration of Developed Countries, 2002-2010 Broadband per 100 Inhabitants, Developed Countries, 2000-2010 35.0% 38.8% 2002 2003 41.7% 44.1% 47.4% 53.7% 57.8% 61.8% 65.6% 60 51.1 Crossover point 50 40 2004 2005 2006 2007 2008 2009 2010 Fixed & Mobile Broadband subscribers (Mn), % Household (HH) broadband access, select developed countries, 2010 30 24.6 20 250 63.5 200 100 50 10 60.0 150 69.5 64.6 95.9 57.5 51.3 39.0 Spain Italy 0 0 U.K. Germany France Fixed Mobile U.S. Japan % HH Broadband Access Fixed Korea Mobile Note: Mobile Broadband includes all types of wireless high-speed internet access on mobile phones and other devices through portable modems Note: The developed/developing country classifications are based on the UN M49, see: http://www.itu.int/ITU-D/ict/definitions/regions/index.html Source: Capgemini TME Strategy Lab analysis; ITU Statistics 2010 , OECD Broadband statistics Copyright © 2011 Capgemini. All rights reserved. 2 Introduction Challenges Role of BSS/OSS Telcos are facing significant challenges to their business model due to the the inability of forecasted revenue to keep pace with consumption and cost Worldwide Mobile Data Consumption Volume, PB/Month, 2010- 15 Index of Mobile Data Revenue and Data Volume (Base year 2010) 6,107 CAGR 92.5% 3,717 2,146 231 533 2010 2011 Data Revenue Data Volume Data Cost Telco Squeeze 1,136 2012 2013 2014 2015 Worldwide Mobile Data Revenue, $Bn, 2010 - 15 26X CAGR 12.3% 255 297 338 380 419 456 4-6X 2X 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Source: Capgemini TME Strategy Lab analysis; WCIS Forecasts, 2011; Cisco, “Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010–2015”, 2011 Copyright © 2011 Capgemini. All rights reserved. 3 Introduction Challenges Role of BSS/OSS OSS/BSS holds the key to address key operator goals in the current market Key Operator Goals in Today’s world Drive Revenues • New service areas such as M to M (telematics, ehealth,... ) • Rapidly evolve and commercialize services • Capitalize on the rising demand for content • Partner and offer third party services • Increasing the gamut of services offered • Flexible and standards based IT systems • Real-time Services • Better align IT with the longterm strategic goals • IT as a business enabler and not a cost center • Outsource routine functions to focus on innovation • Improve & sell QoS Cut Costs • Personalized service offerings • Usage of cloud to ‘rent rather than buy • Network optimisation through usage observation. Create new revenue opportunities Develop Flexible Business Models OSS/BSS Systems Align QoS with Customer Class of Service Align IT spend with strategic goals Copyright © 2011 Capgemini. All rights reserved. 4 Challenges Introduction Role of BSS/OSS Advent and growth of of smart portable devices is driving significant uptake of mobile content consumption The rapid surge in smartphone penetration over the past few years is excepted to continue Top Mobile Activities in EU5 by % Share of Total Mobile Users, December 2010 Growth in Smartphone Penetration, Percentage of Wireless Subscribers, North-America and Western Europe, 2009-2014 Weather 54% 51% 44% 44% 37% 33% 32% 49% 16.4% Social N/W and Blog 18.0% Email 37% 32% 28% 25% 22.2% Apps 28.0% Internet Browsing 28.8% News and Information 32.2% Connected Media 41.1% Photos 57.5% Text Messaging 2009 2010 North America 2011 2012 2013 2014 82.7% 0% 20% 40% 60% 80% 100% Western Europe Source: eMarketer: “Canadian Mobile Subscriptions to Climb 20% by 2014”, June 2010; comScore, “The comScore 2010 Mobile Year in Review”, February 2011 Copyright © 2011 Capgemini. All rights reserved. 5 Challenges Introduction Role of BSS/OSS The demand for new services and adoption of devices with higher data usage levels will further accelerate this trend File sharing and Video are expected to be the largest segments of consumer internet traffic, fueled by content sharing amongst digital consumers Mobile Internet Devices with higher processing power and access speeds have higher data consumption Average Data Consumption per month by Device Type, Mb, 2010 Global Consumer Internet Traffic by segment, PB per month, 2009-2014 45,000 8,000 40,000 7,000 7 GB 35,000 CAGR 36% 30,000 6,000 25,000 5,000 20,000 4,000 15,000 3,000 10,000 5,000 2,000 1-1.4 GB 0 2010 2011 2012 2013 File Sharing Internet Video Web/Data Internet Video to TV Video Calling Online Gaming VoIP 2014 300-500 MB 1,000 1-25 MB ~50 MB ~150 MB 0 Basic or Blackberry Multimedia Phone Other Smart Phone iPhone 3G Wireless Card 4G Wireless Card Source: KPCB, 2011, FCC,” Annual Report and Analysis of Competitive Market Conditions With Respect to Mobile Wireless, Including Commercial Mobile Services”, May 2010, Cisco, “Cisco Visual Networking Index: Usage Study”, October 2010 Copyright © 2011 Capgemini. All rights reserved. 6 Challenges Introduction Role of BSS/OSS The market is also witnessing emergence of multiple pricing models that bring forth with them new IT challenges Pricing Models Description Example Indicative IT Challenge Pay-per-Use Allowing consumers to access content per usage instance WSJ Mobile App CRM/Billing systems not capable of handling dynamic scenarios with real-time charging and payment Context Based Pricing Pricing involving combination of service type, partner subsidy, subscriber segment, location Location -based Services Billing systems are not capable of real-time charging based on multiple variables defining context QoS / bandwidth Based Pricing Charging based on QoS / bandwidth demands and network resource utilization Netflix Billing systems do not have capability to dynamically charge based on real-time session / network data In-app purchasing Allowing consumer to purchase content within application Angry Birds Partner billing is not capable of handling dynamic scenarios where charging / billing depends on customer’s purchase decision Advertising supported Cross subsidies / freebies for accepting ads Groupon Mobile Billing systems may not be capable of handling dynamic charging scenarios based on customer’s decision of accepting advertisement Personalized Bundles Offering personalized bundles based on a customer’s behavior / preferences Behaviorbased Personalization Billing silos, lack of single view of customer and lack of real-time pricing makes personalized offers difficult Copyright © 2011 Capgemini. All rights reserved. 7 Challenges Introduction Role of BSS/OSS Operators will need to modify the operational models and the nature of their involvement to address emerging opportunities Product Description Electronic book reader, with bundled global 3G access Product has access to Kindle bookstore for purchasing e-books Car navigation device with bundled 3G access Key Consumer Benefits Operator’s Involvement Pervasive global access to 3G for purchasing content without worrying about data harges AT&T provides wholesale access to Amazon for the device AT&T’s involvement is limited to network access without billing Bundled 3G access enabling real-time traffic updates Vodafone offers one year of free bundled access Access bundled for one year Consumers to decide on whether to continue the plan beyond an year Operators will have to be prepared to work with models where they potentially need to integrate billing with partners for revenue share Copyright © 2011 Capgemini. All rights reserved. 8 Challenges Introduction Role of BSS/OSS Managing services in a multi-partner, multi-device environment poses significant challenges to the operator Content Aggregators Customer Journey: Requesting a movie Devices Request Video 1 Operators Allocate Bandwidth Portal 2 Stream Video on the network Network 4 Invoice 3 Send event to charge the customer Customer Billing 5 6 Payments Payments Partner settlement 7 Revenue CHALLENGES Sharing FULFILLMENT Providing a seamless experience with real-time activation / service delivery Effective handling of order fallout / jeopardy situations and keeping the customer informed Managing devices to ensure Quality-Of-Experience ASSURANCE Managing Quality-of-service in a muti-partner domain Ensuring effective bandwidth to provide ubiquitous, quality service BILLING Handling dynamic pricing revenue sharing scenarios e.g. user decision of in-app purchase Dispute settlement / revenue sharing with multiple partners Copyright © 2011 Capgemini. All rights reserved. 9 Introduction Role of BSS/OSS Challenges Upgrading the CRM layer will allow operators to increase their service breadth and depth to implement an integrated multi-channel customer service strategy Capability Maturity Channel Breadth Social Media Customer Service Customer Service Bots Multichannel Integrated Customer Service Social media presence Simple self-service assistant Uniform experience across channels Dedicated social media care teams Simple chat-bots Availability of crosschannel interaction history Social media integration Advanced chat-bots Optimized call handling strategy with seamless switch-over Grand-slam Automated social media monitoring and analytics Mature Presence Growing Presence Untapped Source: Capgemini Analysis; Company Websites Copyright © 2011 Capgemini. All rights reserved. 10 Introduction Role of BSS/OSS Challenges Automation and intelligent targeting using social media will increasing be a critical component of next generation customer service Next Generation Customer Service Solutions and Implementation Next Gen Solution Pro-active identification of customer needs and dissemination of information Behaviour based product discovery Multiple customer service channels with uniform experience Leveraging knowledge of other customers for query/ problem resolution Brand-building by managing the experience of the customers Examples Elaboration Scan social media activity to identify new prospects or cross-sell / up-sell opportunities Place promotional content about new products on social media and invite users to view it Vodafone, Orange and T-Mobile Netherlands have started deploying influencer marketing solutions Drive cross-selling and up-selling by analyzing customer’s past purchasing patterns Amazon’s recommendations are based on predictive analysis based on customer’s past history and comparisons with customers with similar purchase patterns Recommend optimum call strategy based on customer’s channel preferences and call types, etc Escalate from a self-service session to bot and agent assisted session without losing context BT’s ‘Ask Emma’ is a virtual agent service that answers customer’s queries about products and provides basic support Create open discussion boards to discuss customer issues and enable peer resolution AT&T has customer care on Twitter where customers can post problems / share knowledge or seek support from AT&T support team Promote knowledgeable and influential customers as brand evangelists on social media Leverage advanced social media search capabilities to pro-actively identify customer issues Invite users to participate in promotional events Comcast monitors twitter for customer conversations and proactively contacts the customers to address their concerns Source: Capgemini Analysis; Company Websites; Pursway.com, ‘Vodafone, Orange , other mobile leaders and consumer companies step up influencer marketing approach’, Feb 2010; Company Facebook Pages; Businessweek.com, ‘Comcast’s twitter man’, Jan 2009 Copyright © 2011 Capgemini. All rights reserved. 11 Introduction Role of BSS/OSS Challenges Focus on increased personalization, new revenue & pricing models in a multidevice multi-partner environment will drive operator’s OSS/BSS evolution Functional Domains Impacted BSS New Business Requirements New Revenue and Pricing Models Multi-party Services Personalization and Customer Control of Service Dynamic Context Based Charging Real-Time for prepaid OSS / Mediation Integrated Policy Management Converged Billing Platform Real-time Interfaces Dynamic Wholesale Charging Partner Management Subscriber Data Management Real-time ondevice reports Real-time Bandwidth, QoS, Resource Management Enhanced Policy Management New Functionality Required Source: Capgemini TME TS Lab analysis, Policy Management OTA Updates Existing Functionality that needs Enhancement Copyright © 2011 Capgemini. All rights reserved. 12 Introduction Role of BSS/OSS Challenges The existing OSS/BSS landscapes are insufficient and must be adapted to meet the market demands Utilize BI solutions for network and service quality De-couple channels from order processes Increased order automation Innovate your social media strategy Ensure billing systems can support new models Prepare systems for increased use of third parties Improved self service solutions Usage data warehouses Re-think traffic data solutions Mediation is key in reducing billing data Build social CRM solutions Copyright © 2011 Capgemini. All rights reserved. 13 About Capgemini TME TME is a Global practice of more than 8000 consultants TELECOM • Wireline • Wireless • Cable • ISPs • Portals • Transformations MEDIA • Production (cinema, music, tv, games) • Distribution (b-cast, b-band, mobile) • Press & Publishing Advertising • Intellectual Property Management ENTERTAINMENT • Home Entertainment distribution • Hospitality & Theme Parks • Sports Associations • Arts (museum, theatre) what makes us different ? C4 Consulting Practice COMMERCE CONNECTIVITY CONTENT CUSTOMER EXPERIENCE • A 350 strong global management consulting unit focusing exclusively on all the converging communication industries • Experts in business strategy, launch & transformation C4 Advisory Board • Founded in 2006 • Gathering of 20+ CxO of the global TME industry TME Strategy Lab • Research points of views on industry trends • Ongoing monitoring of market & innovations • Bespoke research and analysis Global TME presence • 30+ countries across US, EMEA and Asia Pacific Global Delivery Model Rightshore™ Model • A comprehensive transformation solution for Telcos delivered by a global delivery team • Deployment of standard business processes • The right mix of local, nearshore and offshore delivery capabilities based on customer needs TME Expert Networks Over 1,500 Dedicated Consultants in the TME Centre of Excellence in India servicing: CTP – Comm’s Transformation Platform • Global networks of subject matter experts that focus on key technology challenges • Billing, CRM, OSS/NGS & Digital Content We leverage the depth and breadth of our Industry knowledge to provide leading edge solutions Copyright © 2011 Capgemini. 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