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Outsourced Integrated BSS: Reduced Risk and Control for MVNOs?
By Rob Smith
It’s fair to say that, since their deployment in the early 1990s, Mobile Virtual Network Operators (MVNOs) have proven to be an innovative and revenue-generating asset in the communications marketplace. We’ve seen fluctuating interest in the MVNO business model in recent years but the last year in particular has seen a significant upsurge of interest, one that extends across a wide range of existing and new wholesale business models, including the rise of data MVNOs for services such as Machine to Machine (M2M) and cloud-service aggregators that can address the broad set of communications services in support of Bring Your Own Device (BYOD) for SME customers. If the recent MVNO congress in Paris is anything to go by, there is plenty of opportunity in the market for a new influx of MVNOs, but what is needed to successfully launch and manage a compelling mobile-centric offering that provides a seamless and valued customer experience?
There are a mix of factors that point to outsourcing of integrated Business Support Systems (BSS) as they are key to successful startup and growth in an ultra-competitive market (particularly in which the MVNO typically has a lack of technical structure/legacy). Without the same back-office legacy systems and cost base as the Mobile Network Operators (MNOs), time to market and operational cost-efficiency are key benefits of the managed service model, one that leverages the managed service provider’s expertise and economies of scale. For MVNOs, however, there is an equally strong imperative to have the greatest possible control over their services and delivery, which is often manifest as the need to own the OSS-BSS infrastructure and get as close to the core network as possible. However, integrated BSS – where the three main components of billing, policy and charging, and analytics work in unison to deliver a seamless and dynamic customer experience – offers a lower risk, hybrid model that can provide the necessary control without the cost and complexity of owning and operating the entire stack. While it can make sense for a well-established MVNO with a growing and profitable customer base to invest in infrastructure for greater control, the danger for greenfield startups is that when cost and complexity are front-loaded, they often become the critical determining factors of an MVNO’s fortunes, rather than the strength of its market proposition.
To put that in context of today’s marketplace, with traditional mobile voice and messaging revenues in decline, there is an opportunity for MVNOs to develop convergent market offerings that, through strategic commercial partnerships, combine mobility with cloud computing and over-the-top services. In a multifaceted business model that combines telecoms and IT, there is a need for deeper granularity in rating and billing, such as linking price plans, quality of service, and greater assurance of the overall customer experience through integrated policy management and data analytics. An integrated BSS solution can significantly help to support this proposition.
In a challenging economic climate, an MVNO must effectively manage supplier costs and optimize operational cost-efficiency such that it can present competitive market propositions without prompting a "least cost" price war, something that can devalue brand credibility and introduce financial risk. As such, an MVNO could look to outsource its integrated BSS operations to leverage economies of scale and cost efficiencies without the risk of sacrificing control.
A trusted provider of hosted managed BSS services can ensure that the MVNO billing function is scalable, accurate and can add customer value through policy and analytics-based transparency that will allow them to track against Service Level Agreements.
Ultimately, an intelligent, outsourced integrated BSS solution can provide MVNOs with the least risk and greatest control for revenue-generation in a competitive market.
Rob Smith is director, marketing development, MDS. Smith has 10 years of experience in the telecoms industry, with a sustained track-record of delivery and creating growth.
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