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Customer Care and Billing Background
Over the past two years, telecommunications carriers have been reeling from the combined effect of a bandwidth glut, which has forced down prices, and a capital market squeeze. Many carriers have responded to the hard times by reducing capital spending. The level of capital spending by US telecommunications companies in 2002 was 15 percent to 30 percent less than expenditures in 2000, according to several industry estimates, and these declines have followed us into the first half of 2003.
At the present juncture, however, INSIGHT’s research suggests that the telecom capital spending downturn is not being accompanied by equivalent declines in operations support system (OSS) spending. If the unused infrastructure assets that are the first cause of the “glut” are ever going to provide a return, OSSes will be needed to unlock their value.
OSSes give telecommunications service providers the ability to create, deploy, manage, maintain, and bill for telecommunications services. In this report, INSIGHT analyzes the billing and customer care segment of the global OSS market. Billing and customer care applications represent the customer-facing portion of the OSS systems. Any time an established carrier or a new entrant service provider contemplate turning up a new service, concerns about how customer care and billing will be addressed are a first line priority.
INSIGHT’s definition of OSSes includes the following components:
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Application software to provide the system functionality, such as customer care, billing, or network equipment surveillance and control;
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Computer hardware (e.g., mini-computer server) to run the software, including all required low-level software, such as the operating system (OS) and middleware;
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Computer hardware and software maintenance contracts; and
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Professional services applicable to the installation and adaptation of the OSS to the client’s environment.
While money continues to be tight, carriers around the globe recognize the need for a new generation of back-office OSSes to handle their new wireless and packet-based services. The very composition of these services are often defined in software, with Internet protocol (IP)-based network elements making a rich spectrum of new services available, such as “follow me anywhere” calling, true unified messaging, and multimedia conferencing. In the converged environment, OSSes are now being developed concurrently with the new service offerings, as opposed to being an afterthought, as typically was the case in the circuit-switched environment.
New Priorities For Customer Care and Billing OSSes
If there is a root cause for the new attitude toward OSSes, it is increasing levels of competition. Competition has forced providers to focus on the customer, and today’s OSSes are all about easier and better customer contact. While traditional OSSes were geared toward managing the network, next-generation OSSes respond to, and in many cases manage, the service provider’s total relationship with the customer. For example
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Chapter I
EXECUTIVE SUMMARY
1.1 Customer Care and Billing Background
1.2 New Priorities Drive OSS Market
1.3 The Customer Care and Billing Market
Chapter II
DEFINITIONS AND OVERVIEW
2.1 OSS Defined
2.1.1 Application Software
2.1.2 Middleware
2.1.3 Hardware
2.1.4 Professional Services
2.1.5 Definitions Summary
2.2 Worldwide Overview
2.2.1 United States: The Breakup of the Bell System
2.2.1.1 The Telecommunications Act of 1996
2.2.1.2 The Fall of AT&T
2.2.2 Rest of the World: Liberalizing the Telecom Infrastructure
2.2.3 Worldwide Wireless: New Opportunities
2.3 Operations Support Applications
2.3.1 Business Operations Support
2.3.1.1 Customer Care
2.3.1.2 Service Orders
2.3.1.3 Billing Mediation
2.3.1.4 Rating
2.3.1.5 Billing
2.4 OSS Market Structure
2.4.1 OSS Vendor Market History
2.4.2 Types of OSS Vendors
2.4.3 OSS Partnership Structures
Chapter III
MARKET TRENDS
3.1 Common OSS Trends
3.2 Domestic Trends
3.3 International Trends
3.4 Wireline Carrier Trends
3.5 Wireless Carrier Trends
3.6 Satellite Trends
3.7 Cable TV Trends
3.8 Major Technology Trends
3.8.1 Optical Transmission and Network Management
3.8.2 Object Orientation
3.9 Internet Trends
3.9.1 IP Telephony and Enhanced IP Services
3.9.2 IP-Based Virtual Private Networks
3.10 Emerging OSS Opportunities
Chapter IV
OSS CUSTOMER MARKETS
4.1 Customer Requirements
4.2 Domestic Wireline Market Needs
4.2.1 Implementing Local Number Portability
4.2.2 Preventing Number Exhaustion
4.2.3 Effective Electronic Bonding
4.2.4 Monitoring Network Quality
4.2.5 Outsourcing/Demand for Application Services
4.2.6 Customer-Centric Market Differentiation
4.2.7 Creative Asset Utilization
4.2.8 Changing Internet Access Strategies
4.2.9 Broadband Network Management
4.3 Domestic Wireless Market Needs
4.3.1 Coping with Wireless Carrier Convergence
4.3.2 Reducing Customer Churn Rates
4.3.3 Achieving Over-The-Air Service Activation
4.3.4 Maintaining Network Reliability and Quality
4.3.5 Meeting Wireless Number Portability FCC Mandate
4.3.6 Reducing Fraud in Voice and Data Environments
4.3.7 Collecting Revenues from Intercarrier Billing
4.4 International Wireline Market Needs
4.5 International Wireless Market Needs
4.6 Cable TV Service Provider Market Needs
4.7 Internet Service Provider Market Needs
4.7.1 The New Importance of Scaleability
4.7.2 New Services and the IP Infrastructure
4.7.3 Upgrading Network Equipment
4.7.4 Providing Network Security
4.7.5 Billing for Enhanced Internet Services
4.7.6 Meeting Consumer Demand for Fast Internet Access
4.7.7 Reliable VoIP and Real-Time Interactive Services
Chapter V
OSS VENDORS
5.1 Overview
5.2 Software Development Toolkit Providers
5.3 Solution Providers
5.4 Independent Software Vendors
Chapter VI
MARKET FORECAST
6.1 Introduction
6.2 Methodology
6.2.1 Market Analysis Structure
6.2.2 OSS Application Categories
6.2.3 Addressable Market Methodology
6.2.4 Methodology Algorithm
6.2.5 Forecasting Model Enhancements
6.3 Global Forecasts
6.4 North America
6.4.1 Wireline
6.4.2 Wireless
6.4.3 Broadband
6.5 International
6.5.1 Wireline
6.5.2 Wireless
6.5.3 Broadband
6.6 Europe/Middle East/Africa
6.6.1 Wireline
6.6.2 Wireless
6.6.3 Broadband
6.7 Asia/Pacific
6.7.1 Wireline
6.7.2 Wireless
6.7.3 Broadband
6.8 Latin America/Caribbean
6.8.1 Wireline
6.8.2 Wireless
6.8.3 Broadband
Appendix
GLOSSARY
Table of Figures
I-1 Network Support Overview
I-2 Worldwide OSS Sales Revenue Forecast, 2002-2007 ($Millions)
II-1 Operations Support System Dataflow
II-2 Business Operations Systems Dataflow
III-1 Service Provider Goal Hierarchy
III-2 Network Traffic: IP, Non-IP Data, and Circuit-Switched, 1997-2004 (Tbit/s per Day)
III-3 HFC Architecture
III-4 SONET/SDH vs. WDM Expansion
IV-1 Local Number Portability Using Location Routing Number Architecture
IV-2 Methods Used to Send CLEC Orders to ILEC Systems, 2000
IV-3 E-Bonding Between a CLEC’s and ILEC’s OSSes and Databases
V-1 Toolkit Vendors’ Fit Into the TMN Hierarchy
VI-1 Components of IT Budget in 2002
VI-2 OSS Component Mix, 2002 and 2007
VI-3 Global Carrier Revenue Distribution by Region, 2002 and 2007
VI-4 Global Carrier Revenue Distribution, Wireline vs. Wireless, 2002 and 2007
VI-5 Total Worldwide OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-6 Worldwide OSS Sales Distribution by Region for Billing and Customer Care, 2002 and 2007
VI-7 Total North American OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Mil)
VI-8 Total International OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-9 Total Europe/Middle East/Africa OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-10 Total Asia/Pacific OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-11 Total Latin America/Caribbean OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
Table of Tables
I-1 OSS Market Segmentations
II-1 OSS Definitions Summary
II-2 ILEC Regulatory Checklist
II-3 RBOC Filing Status for Offering Long Distance Services Within Local Operating Regions
IV-1 Customer Markets Defined
IV-2 Summary of Common Service Provider OSS Requirements and Needs Fulfilled
IV-3 Top Ten US Multiple Systems Operators, 2001
IV-4 Ten Largest Cable Systems Ranked by Subscribers, 2002
IV-5 Top Fifteen Internet Service Providers Ranked by Subscribers, 2001
V-1 Summary of OSS Offerings by the Software Development/Toolkit Vendors
V-2 Summary of OSS Offerings by the Solution Providers
V-3 Summary of OSS Offerings by the Independent Software Vendors
VI-1 Systems Component Categories
VI-2 Customer Markets Segmented
VI-3 Investment Payback Horizons by Market Segment
VI-4 Worldwide Carrier Market Segment Revenue Base and Growth, 2002-2007 ($Millions)
VI-5 Worldwide OSS Expenditure Distribution for Billing and Customer Care, 2002 and 2007
VI-6 Global Carrier Revenue by Region, 2002-2007 ($Millions)
VI-7 Worldwide OSS Sales for Billing and Customer Care by Region, 2002-2007 ($Millions)
VI-8 Worldwide OSS Sales Revenue for Billing and Customer Care, Wireline vs. Wireless, 2002-2007 ($Millions)
VI-9 Worldwide OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-10 North American OSS Sales Revenue for Billing and Customer Care, Wireline vs. Wireless, 2002-2007 ($Millions)
VI-11 North American Wireline OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-12 North American Wireline OSS Sales Distribution for Billing and Customer Care 2002 and 2007
VI-13 North American Wireless OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-14 North American Wireless OSS Sales Distribution for Billing and Customer Care, 2002 and 2007
VI-15 North American Broadband OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-16 North American Broadband OSS Sales Distribution for Billing and Customer Care, 2002 and 2007
VI-17 International OSS Sales Revenue for Billing and Customer Care, Wireline vs. Wireless, 2002-2007 ($Millions)
VI-18 International Wireline OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-19 International Wireline OSS Sales Distribution for Billing and Customer Care, 2002 and 2007
VI-20 International Wireless OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-21 International Wireless OSS Sales Distribution for Billing and Customer Care, 2002 and 2007
VI-22 International Broadband OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-23 International Broadband OSS Sales Distribution for Billing and Customer Care, 2002 and 2007
VI-24 Europe/Middle East/Africa OSS Sales Revenue for Billing and Customer Care, Wireline vs. Wireless, 2002-2007 ($Millions)
VI-25 Europe/Middle East/Africa Wireline OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-26 Europe/Middle East/Africa Wireline OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-27 Europe/Middle East/Africa Wireless OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-28 Europe/Middle East/Africa Wireless OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-29 Europe/Middle East/Africa Broadband OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-30 Europe/Middle East/Africa Broadband OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-31 Asia/Pacific OSS Sales Revenue for Billing and Customer Care, Wireline vs. Wireless, 2002-2007 ($Millions)
VI-32 Asia/Pacific Wireline OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-33 Asia/Pacific Wireline OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-34 Asia/Pacific Wireless OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-35 Asia/Pacific Wireless OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-36 Asia/Pacific Broadband OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-37 Asia/Pacific Broadband OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-38 Latin America/Caribbean OSS Sales Revenue for Billing and Customer Care, Wireline vs. Wireless, 2002-2007 ($Millions)
VI-39 Latin America/Caribbean Wireline OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-40 Latin America/Caribbean Wireline OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-41 Latin America/Caribbean Wireless OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-42 Latin America/Caribbean Wireless OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
VI-43 Latin America/Caribbean Broadband OSS Sales Revenue for Billing and Customer Care, 2002-2007 ($Millions)
VI-44 Latin America/Caribbean Broadband OSS Sales Distribution for Billing and Customer Care, 2002-2007 ($Millions)
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