OSS BSS World Presentation – Telco trends and their impact on IT Jean-Marc Steffann Sep 2011

OSS BSS World Presentation – Telco trends and their impact on IT

Jean-Marc Steffann

Sep 2011

2Copyright © 2011 Capgemini. All rights reserved.

Rapid growth of mobile data consumption has seen mobile broadband reaching high penetration levels in developed countries

Source: Capgemini TME Strategy Lab analysis; ITU Statistics 2010 , OECD Broadband statisticsNote: The developed/developing country classifications are based on the UN M49, see: http://www.itu.int/ITU-D/ict/definitions/regions/index.html

Internet penetration in developed countries has grown rapidly to more than double the global average (29%)

2002 2003 2004 2005 2006 2007 2008 2009 2010

35.0%38.8% 41.7% 44.1%

47.4%53.7%

57.8%61.8%

65.6%HH Internet Penetration of Developed Countries, 2002-2010

Fixed & Mobile Broadband subscribers (Mn), % Household (HH) broadband access, select developed countries, 2010

Mobile broadband in developed countries has seen faster uptake than fixed in the last five years

20002001

20022003

20042005

20062007

20082009

20100

10

20

30

40

50

60

24.6

51.1

Broadband per 100 Inhabitants, Developed Countries, 2000-2010

Fixed MobileU.K. Germany France Spain Italy U.S. Japan Korea

0

50

100

150

200

250

Fixed Mobile

69.5 64.6 57.551.3 39.0

63.5

60.0

95.9

% HH Broadband AccessNote: Mobile Broadband includes all types of wireless high-speed internet access on mobile phones and other devices through portable modems

Crossover point

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

2010 2011 2012 2013 2014 2015

255 297

338 380

419 456

2010 2011 2012 2013 2014 2015

231 5331,136

2,146

3,717

6,107

CAGR92.5%

CAGR12.3%

Source: Capgemini TME Strategy Lab analysis; WCIS Forecasts, 2011; Cisco, “Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2010–2015”, 2011

Worldwide Mobile Data Revenue, $Bn, 2010 - 15

Worldwide Mobile Data Consumption Volume, PB/Month, 2010- 15

Index of Mobile Data Revenue and Data Volume (Base year 2010)

2010 2011 2012 2013 2014 2015

Data Revenue Data Volume

Data Cost

26X

2X

4-6X

Telco Squeeze



Cut Costs

Drive Revenues

Key Operator Goals in Today’s world

OSS/BSS holds the key to address key operator goals in the current market

Develop Flexible Business Models

Align IT spend with strategic

goals

Align QoS with Customer Class

of Service

Create new revenue

opportunities

• New service areas such as M to M (telematics, ehealth,... )

• Capitalize on the rising demand for content

• Increasing the gamut of services offered

• Improve & sell QoS

• Personalized service offerings

• Usage of cloud to ‘rent rather than buy

• Network optimisation through usage observation.

• Better align IT with the long-term strategic goals

• IT as a business enabler and not a cost center

• Outsource routine functions to focus on innovation

• Rapidly evolve and commercialize services

• Partner and offer third party services

• Flexible and standards based IT systems

• Real-time Services

OSS/BSS Systems



Advent and growth of of smart portable devices is driving significant uptake of mobile content consumption

Text Messaging

Photos

Connected Media

News and Information

Internet Browsing

Apps

Email

Social N/W and Blog

Weather

0% 20% 40% 60% 80% 100%

82.7%

57.5%

41.1%

32.2%

28.8%

28.0%

22.2%

18.0%

16.4%

Source: eMarketer: “Canadian Mobile Subscriptions to Climb 20% by 2014”, June 2010; comScore, “The comScore 2010 Mobile Year in Review”, February 2011

2009 2010 2011 2012 2013 2014

32% 33%

37%

44%

51%54%

25%

28%32%

37%

44%

49%

North America Western Europe

The rapid surge in smartphone penetration over the past few years is excepted to continue

Growth in Smartphone Penetration, Percentage of Wireless Subscribers, North-America and Western Europe, 2009-2014

Top Mobile Activities in EU5 by % Share of Total Mobile Users, December 2010



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

2010 2011 2012 2013 20140

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

Global Consumer Internet Traffic by segment, PB per month, 2009-2014

File Sharing Internet Video Web/Data

Internet Video to TV Video Calling Online Gaming

VoIP

CAGR36%

Mobile Internet Devices with higher processing power and access speeds have higher data consumption

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Average Data Consumption per month by Device Type, Mb, 2010

1-25 MB ~50 MB ~150 MB

300-500 MB

1-1.4 GB

7 GB

Basic or Multimedia

Phone

Blackberry iPhone 3G Wireless

Card

4G Wireless

Card

Other Smart Phone


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


The market is also witnessing emergence of multiple pricing models that bring forth with them new IT challenges

Pay-per-UseAllowing consumers to access content per usage instance

CRM/Billing systems not capable of handling dynamic scenarios with real-time charging and payment

WSJ Mobile App

Context Based Pricing

Pricing involving combination of service type, partner subsidy, subscriber segment, location

Billing systems are not capable of real-time charging based on multiple variables defining context

Location-based Services

QoS / bandwidth

Based Pricing

Charging based on QoS / bandwidth demands and network resource utilization

Billing systems do not have capability to dynamically charge based on real-time session / network data

Netflix

In-app purchasing

Allowing consumer to purchase content within application

Partner billing is not capable of handling dynamic scenarios where charging / billing depends on customer’s purchase decision

Angry Birds

Advertising supported

Cross subsidies / freebies for accepting ads

Billing systems may not be capable of handling dynamic charging scenarios based on customer’s decision of accepting advertisement

Groupon Mobile

Personalized Bundles

Offering personalized bundles based on a customer’s behavior / preferences

Billing silos, lack of single view of customer and lack of real-time pricing makes personalized offers difficult

Behavior-based Personalization

Pricing Models Description Example Indicative IT Challenge



Operators will need to modify the operational models and the nature of their involvement to address emerging opportunities

Operator’s Involvement

Key Consumer Benefits

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

Pervasive global access to 3G for purchasing content without worrying about data harges

Bundled 3G access enabling real-time traffic updates

Access bundled for one year

AT&T provides wholesale access to Amazon for the device

AT&T’s involvement is limited to network access without billing

Vodafone offers one year of free bundled access

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



Managing services in a multi-partner, multi-device environment poses significant challenges to the operator

FULFILLMENT

ASSURANCE

BILLINGCH

AL

LE

NG

ES

OperatorsContent

Aggregators

Portal

Request Video

Network12

Devices

Allocate Bandwidth

Stream Video on

the network

3 Customer Billing

Send event tocharge the customer

4

5

Invoice

Payments6Payments Partner

settlement Revenue Sharing

7

Cu

sto

mer

Jo

urn

ey:

Req

ues

tin

g a

mo

vie

Managing devices to ensure Quality-Of-Experience

Managing Quality-of-service in a muti-partner domain

Ensuring effective bandwidth to provide ubiquitous, quality service

Providing a seamless experience with real-time activation / service delivery

Effective handling of order fallout / jeopardy situations and keeping the customer informed

Handling dynamic pricing revenue sharing scenarios e.g. user decision of in-app purchase

Dispute settlement / revenue sharing with multiple partners



Upgrading the CRM layer will allow operators to increase their service breadth and depth to implement an integrated multi-channel customer service strategy

Cap

abili

ty M

atu

rity

Channel Breadth

Social media presence

Social media presence

Dedicated social media care teamsDedicated social media care teams

Social media integration

Social media integration

Automated social media monitoring and

analytics

Automated social media monitoring and

analytics

Social Media Customer Service

Simple self-service assistant

Simple self-service assistant

Simple chat-botsSimple chat-bots

Advanced chat-botsAdvanced chat-bots

Customer Service Bots

Uniform experience across channels

Uniform experience across channels

Availability of cross-channel interaction

history

Availability of cross-channel interaction

history

Optimized call handling strategy with seamless switch-over

Optimized call handling strategy with seamless switch-over

Multichannel Integrated Customer Service

Grand-slam

Mature Presence

Growing Presence

UntappedSource: Capgemini Analysis; Company Websites



Next Generation Customer Service Solutions and Implementation

Automation and intelligent targeting using social media will increasing be a critical component of next generation customer service

Pro-active identification of customer needs and

dissemination of information

Multiple customer service channels with uniform

experience

Behaviour based product discovery

Leveraging knowledge of other customers for query/

problem resolution

Next Gen Solution Elaboration Examples

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

Drive cross-selling and up-selling by analyzing customer’s past purchasing patterns

Create open discussion boards to discuss customer issues and enable peer resolution

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

Brand-building by managing the experience of

the customers

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

Vodafone, Orange and T-Mobile Netherlands have started deploying influencer marketing solutions

Comcast monitors twitter for customer conversations and pro-actively contacts the customers to address their concerns

Amazon’s recommendations are based on predictive analysis based on customer’s past history and comparisons with customers with similar purchase patterns

AT&T has customer care on Twitter where customers can post problems / share knowledge or seek support from AT&T support team

BT’s ‘Ask Emma’ is a virtual agent service that answers customer’s queries about products and provides basic support

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



Focus on increased personalization, new revenue & pricing models in a multi-device multi-partner environment will drive operator’s OSS/BSS evolution

New

Bu

sin

ess

Req

uir

emen

ts

Functional Domains Impacted

New Revenue and Pricing Models

Multi-party Services

Personalization and Customer

Control of Service

Enhanced Policy Management

BSS OSS / Mediation

Dynamic Context Based Charging

Integrated Policy Management

Dynamic Wholesale Charging

Real-time Interfaces

Subscriber Data Management

Converged Billing Platform

Policy Management

OTA Updates

New Functionality Required

Existing Functionality that needs Enhancement

Real-time on-device reports

Source: Capgemini TME TS Lab analysis,

Real-time Bandwidth, QoS,

Resource Management


Real-Time for pre-paid

Partner Management


The existing OSS/BSS landscapes are insufficient and must be adapted to meet the market demands

Prepare systems for increased use of third parties

Improved self service solutions

Mediation is key in reducing billing data Re-think traffic

data solutions

De-couple channels from order processes

Innovate your social media strategy

Increased order automation

Ensure billing systems can support new models

Usage data warehouses

Build social CRM solutions

Utilize BI solutions for network and service quality


About Capgemini TME


• Wireline• Wireless• Cable• ISPs• Portals• Transformations

• Production (cinema, music, tv, games)

• Distribution (b-cast, b-band, mobile)• Press & Publishing Advertising• Intellectual Property Management

• Home Entertainment distribution• Hospitality & Theme Parks• Sports Associations• Arts (museum, theatre)

C4 Consulting Practice• 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

CONTENT

COMMERCE

CUSTOMER EXPERIENCE

CONNECTIVITY

TME Strategy Lab• Research points of views on industry trends• Ongoing monitoring of market & innovations• Bespoke research and analysis

TME Expert Networks• Global networks of subject matter experts that

focus on key technology challenges• Billing, CRM, OSS/NGS & Digital Content

Global TME presence • 30+ countries across US,

EMEA and Asia Pacific

Rightshore™ Model• The right mix of local,

nearshore and offshoredelivery capabilities based

on customer needs

Over 1,500 Dedicated Consultants in the TME Centre of Excellence in India servicing:

Global Delivery Model

what makes us different ?

CTP – Comm’s Transformation Platform• A comprehensive transformation solution for

Telcos delivered by a global delivery team• Deployment of standard business processes

TELECOMTELECOM MEDIAMEDIA ENTERTAINMENTENTERTAINMENT

We leverage the depth and breadth of our Industry knowledge to provide leading edge solutions

TME is a Global practice of more than 8000 consultants

http://www.vodafone.com/hub_page.html

Documents

OSS BSS World Presentation – Telco trends and their impact on IT Jean-Marc Steffann Sep 2011