OSS/BSS: An Analyst's View

Operating support systems (OSS) and billing support systems (BSS) have been bread and butter elements for years for service providers, but now that they're moving towards virtualization in their networks and cloud-based services, legacy OSS/BSS have become a ball and chain.

Communication service providers can't just drop their legacy OSS/BSS as they build out their next-gen networks with new technologies such as SDN and NFV. Those old systems are still providing basic functions, such as billing and service assuarance, to millions of customers, but they're a hindrance to implementing NFV architectures.

Telco Transformation is sending out the same set of OSS/BSS questions to several communications service providers (CSPs) this month, but this first installment is with Heavy Reading's James Crawshaw, senior analyst of OSS/BSS transformation.

Telco Transformation: Given the move to virtualization and cloud-based services, what changes do you think service providers need to make to their existing OSS/BSS in order to be ready for virtualization and the cloud?

James Crawshaw: There is a paper from ONF called "Impact of SDN and NFV on OSS/BSS" that highlights some of the key requirements such as the ability to collect and monitor data in near real-time, the ability to interoperate with the NFV orchestrator, and the ability to support flexible service modeling (for example, YANG) as opposed to the traditional static OSS adapters.

TT: Do you think the existing OSS is hampering service providers' ability to offer on demand services?

JC: I think the consensus for most operators is yes. Like any new technology the challenge is usually getting it to work with the installed base.

TT: Which of the traditional OSS and BSS categories, such as service assurance, revenue management, and customer experience management, are service providers more likely to be investing in over the next two years?

JC: I think customer experience management is still a hot topic and operators are prepared to allocate budget to it because it is seen as key to winning new subscribers and retaining existing customers. Service assurance has less direct demand pull from the marketing folks, but is important to the extent that it supports the quality of experience. If by revenue management we mean the ability to proactively offer recommendations and on-demand services based on a subscriber’s real-time experience then, yes, this is also a hot topic within BSS.

TT: In an increasingly competitive landscape, can improved OSS/BSS be a big differentiator for a service provider?

JC: Service providers don’t often talk about OSS/BSS in their marketing literature to either consumers or enterprises and it rarely figures in their presentations to investors. One operator that has been more vocal recently is Eurasian telco Vimpelcom. They announced a $1 billion deal with Ericsson in June to modernize their BSS which they think will enable them to lower IT expenses from 3% of revenue to just 2%. A recent Reuters article stated that Vimpelcom would shift from selling data and voice calls to offering a single, app-based platform where users can communicate for free. Vimpelcom plans to revenue share through partnerships with Internet service providers such as Uber. That would certainly be differentiated, but I’m not sure the revenue share potential would be enough to compensate for free calls and data.

TT: Is there a need for more convergence further down the OSS stack?

JC: There is certainly scope to retire some legacy OSS and consolidate others. There is always a risk-return trade off and if the cost savings do not warrant the risks of impacting service the tendency is to keep old OSS running.

TT: Is there a framework needed for new OSS/BSS that gets all of the parties on the same page? Will TM Forum Frameworx be the gathering spot?

JC: I think the best venue for discussing OSS interoperability issues between telcos remains the TM Forum.

TT: What challenges does the dynamic nature of virtualized networks bring to traditional service assurance and performance monitoring?

JC: The need for near real-time data collection and analysis. Existing systems are set up to poll the network every 15 minutes. This is simply no good for ever changing NFV networks.

TT: As CSPs transition to their hybrid networks, what is their approach in regards to working with current OSS/BSS vendors, and how will that change going forward?

JC: I think the approach is keep spend on the existing OSS to a minimum while making sure it still satisfactorily delivers today’s services.

TT: Will they continue to use the existing OSS/BSS suppliers, or are there smaller new entrants into the market that are more relevant to the challenges that the next-gen networks bring?

JC: I think most carriers are using NFV as an opportunity to review their OSS suppliers, but incumbency will still count for a lot.

TT: Which vendors are coming up with new, better OSS/BSS that work better with SDN/NFV and the cloud?

JC: I don’t want to plug any particular names, but I would just note that there are a lot of innovative companies in this space and the more successful ones will likely get acquired by the traditional OSS vendors and network equipment providers.

— Mike Robuck, Editor, Telco Transformation