Like companies in many industries, telecoms operators are looking to the Cloud as a means of generating efficiencies, reducing equipment costs and improving profit margins. But the opportunities that could be triggered by the Cloud for the communication service provider (CSP) are about so much more than simply storage and reduced operating costs. The Cloud offers CSPs the chance to re-think their business model and open up new areas of revenue.
Nowhere is this more apparent than in the operator’s operational or business support systems (OSS/BSS) environment; when it comes to moving these systems to a Cloud-based model, CSPs have to look beyond the technical challenges and start to think differently to unlock the maximum benefit.
Traditionally, CSPs have always had a linear relationship with their customers – they subscribe to a service and are billed according to how much of that service they have used. Today’s OSS/BSS systems are built around this simple business model and billing in this traditional sense is simply a question of how much of the network’s time or its capacity the consumer has ‘consumed’. It is very much a fixed model and approach, and is not a model designed for innovation – in fact, innovation is largely restricted to creating different tariff plans.
From network-based billing to service-based billing
The change that CSPs need to embrace is a move from a traditional network-based subscriber formula to systems based on what consumers are doing and the services they want to use the network to access. This consumer services-based concept is not exactly new – and indeed within the smartphone app community, it is the standard approach – but CSPs have been marginalised in that space by the app stores. Plus, it requires both an innovation in approach and a change in thinking to break into that marketplace.
Moving the OSS/BSS systems into the Cloud creates just such a platform for innovation and change. That is why it is so exciting. It would enable the CSPs to carefully expose certain elements of their OSS/BSS systems to third parties, to collaborate with other companies to offer innovative new services and applications themselves, and to manage the setup, assurance and billing arrangements of these services in a revenue share model.
Today, in the traditional OSS/BSS world, exposing, parts of the OSS and BSS systems in this way to third parties would effectively mean allowing ‘outsiders’ inside the operator’s network firewall – and that is not a move that many operators would consider sensible.
However, a strategic move to a Cloud-based model for OSS/BSS systems creates the opportunity to carefully open access and create new channels of opportunity without compromising network safety or business intelligence.
For example, a Cloud-based system could enable customer interactions and preferences held within the OSS/BSS to be exposed to support new business models and improved customer experience; while at the same time ensuring that security can be applied to protect operator customer data and maintain privacy and confidentiality.
A new approach
In this way, it becomes possible to create and offer easy monetisable stand-alone applications which allow access to certain elements of generic customer usage information. This in turn enables the CSPs to develop a business model that not only generates revenue from network use, it also generates income from the provision and management of their own and new third-party services.
While maintaining strict customer privacy and confidentiality, operators with OSS/BSS systems in the Cloud can consider creating innovative new packages that offer increased flexibility and open up new revenue streams.
By understanding customer behaviour and preferences for example, CSPs could explore flexible business models that include options such as advertising. In much the same way that the app community uses advertising-supported business models to subsidise so-called ‘freemium’ content, CSPs could potentially create advertising-sponsored tariffs where consumers could earn extra credits in their monthly bundles.
In this and other ways, moving elements of OSS/BSS systems to the Cloud would make it much easier for operators to allow access to those parts of the system they want to open to third parties and expose value. It would serve to liberate CSPs and enable them to think and act more like their virtual network operator (VNO) counterparts and over the top (OTT) players – who in many ways already partially resemble this business approach and benefit from the flexibility derived by not having a physical network to manage and keep secure.
A channel not a pipe
Today’s smartphones are the channel through which business and consumer customers access a whole range of services and applications they consider valuable which are not part of their operator relationship.
The business opportunity facing operators is to use the Cloud to become a channel themselves - enabling innovative third-party suppliers to have improved access to the customer base with a lower cost model. At the same time this helps to create sticky new ‘operator’ services and an improved experience for those customers.
The opportunity presented by the Cloud to traditional CSPs is therefore many-layered. It can provide the environment for new business and service models to be created, and can help to turn a business cost-base into a new revenue stream.
The lesson here is a big one and must not be overlooked. Simply moving OSS/BSS systems to the Cloud alone does not achieve anything other than cost-savings - the biggest change that is required, and the biggest benefits that can be achieved, will come through moving the mindset.
When it comes to the Cloud, operators need a clear vision, and only then can new horizons be explored.