Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
Historically, the primary focus for business support systems platforms has been the commercial side of delivering services, whereas the focus for operations support systems platforms has been on the technical control of services. The emergence of Internet-based services, driven by greater personalization and end-to-end user control, is bringing about the merger of these two kinds of platforms. As a result, the walls between the front and back offices are being torn down, bringing some operator benefits but also adding complexity to their operations.
The shift towards short-duration, zero-commitment transactions
The shift towards content-based services in combination with the introduction of Internet-based retail business models over the past 10 years has opened up a new chapter in terms types of services and the level of commitment that people make when using a service.
Until recently, only a small number of providers used payment models based on zero future commitment, which involves no recurring component and no additional cost for the consumer after the initial purchase. In most cases, this model is based on pay-before-delivery.
In contrast, most non-retail services, including util¬ities and telecommunication services, involve long-term commitment – usually more than one day and, in many cases, months or years. The long-term business model is suited to utility services, where people and enterprises sign up to commercial agreements that provide better prices in exchange for a commitment for longer service periods. This model will continue to generate revenue. However, short-duration services can provide higher margins and compensate for declining revenue streams elsewhere. People are willing to pay more for a short-duration service if it can be delivered in an immediate, efficient and simple way, such as watching a downloaded film.
For short-duration services, greater real-time service enablement will necessitate additional partnerships and introduce new methods that do not require the same level of device pre configuration and network configuration as required today. For example, to determine whether or not a service can be delivered prior to payment processing, service configuration information could be obtained at the point of purchase with the handset or terminal validating delivery capability.
The standardization of service-characterization parameters could result in a large number of repeat service configurations. As the state of a service is controlled by the current – and not the future – view, repeat orders are difficult to handle in many systems. Modifications will need to be made to many of the platforms used today by service providers to manage the future state of a service at any given time.
Service-to-cash
Service-to-cash will be the first area affected by the shift from connectivity-only to content provided together with connectivity, which leads to an increase of smaller transactions and greater revenue risk.
The changes to the processes supporting short-duration services and dynamic service pricing are more extensive in service-to-cash than they are in any other area. These new services make the supply chain more complex and cause some level of revenue splitting. Verification prior to service delivery will become a greater burden on the service provider, as services cannot be retracted once delivered (e.g., once a film is downloaded, it can be viewed). Pre-payment models could reduce this risk, but such a model requires efficient clearinghouses that have tighter consumer-control methods or can absorb the increased risk.
Functions to support micro-billing and more extensive clearinghouse processing will be needed, adding larger-scale external interfaces to systems that have normally been closed behind company firewalls.
Growing importance of real-time policy
Policy will gain greater significance and will be used to control services and enforce charging rules. Per-consumer policies are a prerequisite to enabling the fine-grain controls to accommodate the new service definitions. Consumer profiles will, as a consequence, gain greater importance.
The capability to determine the price of a service at the time of request introduces additional complexity into all the commercial rules relating to it. Product catalogs will need to be dynamic and make use of real-time forecast information to determine the price for a service.
Many operators have invested in IP-fault and SQM platforms, and are likely to do so more extensively as the user experience of shorter-duration services needs more proactive service monitoring. This is the only way to maintain basic service level agreements for such services.
To enable faster reaction times, extending the use of policies and real-time SQM within networks will be necessary. Centralized systems usually cannot provide the speed required to deal with local fluctuations in network use.
Providing simple mechanisms for users to notify their service provider directly about their experience will increase the efficiency of network operating centers and reduce the amount of time spent handling errors that do not directly affect service performance.
Short-duration services and connectivity with content create the additional challenge of ensuring that devices can run a self-diagnosis routine, fixing errors before an SLA has been breached. The increased processing power of devices in combination with existing signaling protocols enables devices to downgrade the quality of many dynamic services, such as codec streaming quality, when required.
Further standardization of quality measures should allow this process to be coordinated across multiple providers in complex service chains. However, some will want to load SLAs that notify the service provider when a specific service is compromised directly onto the device, which would require enabling proactive requests for network changes issued directly from the device while the service is in use.
Conclusion
Based on current market drivers, telecommunication services are expected to shift from a model characterized by long service durations with standard quality levels and prices to a new model featuring short service durations and variable prices that require real-time service management.
In the newer model, the price of a service will be determined through a dynamic combination of duration, lead time, and service content or type, where external identifiers will play a greater role in the authentication and management of service behaviors.
If the market trends continue as forecasted, all internal systems including OSS and BSS will need to be aligned to the new model to accommodate an end-to-end perspective and support greater data sharing beyond the boundaries of existing systems.
Peter Briscoe is executive director of innovation, Business Unit Support Solutions at Ericsson. He directs new programs intended to address evolving priorities in telecom software operations platforms. Briscoe has spent more than 19 years working in telecom operations support, with experience in consulting and software creation spanning fault management, service fulfillment and planning. He has worked on several large deployments around the world, specializing in new network technologies and equipment.
