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. |
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.
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.
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.
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International
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
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
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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.
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 |
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.