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Global Trends

author-image
VoicenData Bureau
New Update
alt="https://img-cdn.thepublive.com/filters:format(webp)/vnd/media/post_attachments/3fc96e233f58dc6fdfa074206cb89819fcc3807013759a09dd37d3111a2c320c.gif (10342 bytes)" align="left" hspace="4" vspace="4">Robert

Rosenberg
is president, The Insight Research Corp., a Parsippany, NJ, USA-based

consultancy providing comparative market research and competitive analysis to the telecom

industry. Insight Research has considerable strength in the area of telecom OSS market

research.
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If one examines the telecom industry

throughout the world, the trends of privatization, deregulation, and free trade are

repeated. Telecom service providers are using the latest technologies to deploy, enhance,

or replace Operations Support Systems (OSSes), to respond to this highly competitive

market-place. OSSes are the Information Technology (IT) infrastructure that enable telecom

service providers with the ability to create, deploy, manage, and maintain network-based

services.

The importance of OSSes is increasing in

relation to the network. Competition has forced telecom providers to focus on the

customer, and OSSes now enable easier and better customer contact.

Traditional OSSes managed the network; new

OSSes respond to and in some cases manage the customer. When the customer contacts the

service provider to arrange for a new service (also known as inbound customer contact),

service activation and availability can be measured in hours (or even minutes), not in

days. If access to the customer’s site is needed, the appointment can be made within

a specified hour on a date convenient for the customer, and not "sometime in the

morning" or "sometime in the afternoon" on a date convenient to the service

provider. Likewise, when a service provider’s customer care centre contacts the

customer (outbound customer contact), representatives can iden tify customers who are

likely to jump to another provider or subscribe to additional services. Theoretically,

revenue and customer satisfaction increase together.

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Telecom service providers throughout the

world will be struggling to understand and deal with global competition. A rapid response

to the widely varying and changing needs of telecom customers is one of the keys to

survival. As network hardware becomes more of a commodity and service creation and

delivery move into the realm of software, the importance of OSSes will increase. While

world-wide telecom revenues are expected to increase from $729.5 billion in 1997 to over

$1.1 trillion in 2002, OSS revenues will increase almost 13 percent faster over the same

period.

face="Times New Roman" size="4" color="#000000">Competition has forced telecom providers

to focus on the customer, and OSSes now enable easier and better customer contact.

Moreover, the international market-place

is trying to catch up with North America. Therefore, the international market for OSS

vendors represents an important opportunity, with spending growth exceeding that of North

America. Both service providers and vendors should be able to take advantage of the

lessons learnt in North America, where competition and customer disloyalty have been a

fact of life in recent years.

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Outside the US, wireline carriers have

less mature OSS infrastructures and will have to spend a great deal of money to deploy

robust, flexible, standards-compliant systems. A key difference between forces affecting

non-US OSSes and the US OSSes is that outside the US, there is greater emphasis on raising

the quality of service. Whether it is the billing service, or the time taken to get a dial

tone, or the time to install a telephone or repair a broken trunk, the quality of service

still lags behind what customers demand.

This relative lack of maturity in

installed OSSes has both technical and financial benefits. It will be relatively easier

for these carriers to abandon their obsolete systems and to move directly to developing

and deploying integrated enterprise systems. The non-US carriers will not be burdened with

trying to interface with legacy systems designed for a different time.
SIZE="4" COLOR="#016077">

International

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The overall market for OSS sales outside

North America is growing as fast as within North America. Insight Research predicts that

the total revenue will grow to $23.9 billion in the year 2002. As in North America, growth

is being driven by wireless demand.

All three international market segments,

Europe/Middle East, Asia/Pacific, and Latin America/Caribbean have only recently begun to

open their markets and privatize government-owned utilities to meet global trade, economic

union, and business expansion requirements. The result is competition where there was

virtually none and a focus on profitability. Hence, there is a rapid increase in customer

care and billing, plus business management systems.

Europe/Middle East

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The Europe/Middle East market segment is

dominated by Western European economies and their focus on economic union. Several

conflicting trends in these markets have resulted from this pre-occupation. Basically, the

overall economic growth of Germany, France—and to a lesser extent, most other

countries in this region—has stalled. These countries have implemented the economic

policies needed to limit debt as a fraction of GDP, produce a stable currency, and meet

financial pre-requisites.

With limite width="300" height="192" alt="t&m.gif (22290 bytes)" align="right" hspace="4"

vspace="4">d economic growth, overall telecom growth has slowed. In contrast, the move

towards economic union has forced governments to deregulate their markets and privatize

state-owned service monopolies. Expenditure levels on both infrastructure and OSSes should

increase as service providers attempt to stave off competition or achieve market

penetration.

The two other regions in this market

segment, Eastern Europe and the Middle East yield somewhat different expenditure patterns.

In Eastern Europe, the focus is on network infrastructure. Networks long neglected under

Communist rule are now achieving the flexibility and reliability required to attract the

industry. Overall investment in OSSes is further limited by lack of capital and the view

of OSSes as secondary consideration. Investments in OSS by Middle Eastern nations is

likewise limited. Cash flow problems, political instability, and closed markets provide

minimal opportunity for most OSS vendors.

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Latin America/Caribbean

The Latin America/Caribbean market segment

is dominated by Argentina, Brazil, and Mexico, while to a lesser extent by Chile,

Columbia, and Venezuela. State-owned monopolies have only recently been subject to

privatization and deregulation. As compared to Asia/Pacific, the growth in telecom

services has been slower because of several missing key ingredients. Unlike Asia/Pacific,

there are no major global financial markets that depend on reliable telecom for survival.

color="#000000">While world-wide telecom revenues are expected to increase from $729.5

billion in 1997 to over $1.1 trillion in 2002, OSS revenues will increase almost 13

percent faster over the same period.

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Likewise, Latin America/Caribbean has few

global industrial powerhouses in key industries such as automobiles and semiconductors

that also depend on global telecom. Finally, without native hitech industries, the

adoption of technology by the population in general may suffer. Therefore, the development

of a world-class telecom infrastructure has been retarded.

Now, with talk of spreading NAFTA to Latin

America and the opening, of these markets, pent-up and newly-created demand for services

is rapidly expanding this smallest of OSS markets.

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