Cautious Optimism – My View of the OSS/BSS industry in 2009

Recent conversations with OSS/BSS vendors and several Tier 1 communications service providers after TM Forum's Telemanagement World Americas conference in Orlando provided me with some positive news, this amongst the ongoing deluge of sour global economic news that we get bombarded with on a daily basis.  The overall picture is that the current economic climate for the communications industry, while challenging, isn't showing signs of implosion like we saw during the 2001-2002 Internet bubble burst.  Much of the discussions around the state of the OSS/BSS industry leave me cautiously optimistic, at a time when many other industries are suffering.

First, and most importantly, CSP back office transformation projects continue to progress steadily and the strategic nature of better back office efficiency is not something any of them can afford to put on hold.  Most transformation projects within the Tier 1 operators are in the latter stages, and any investment stoppages would create long term headaches once the economic climate improves.   Most CSPs commented that these projects will progress regardless of economic climate, and the ongoing build out of video services as part of the overall service portfolio represents a critical component of current and future revenue growth.  Most also commented that they will prioritize IT projects abased on the expected return on investment.  While most multi-service operators expect to see ongoing declines in fixed line service revenues (even without the touch economic climate),  wireless, broadband and video businesses still show a more positive outlook, recently seen in the financial results announced by AT&T and Verizon. 

Secondly, discussions with OSS/BSS technology suppliers were consistently positive, particularly in regard to the next two upcoming quaters.   Sales pipelines remain strong, and there are few signs of any back office projects being put on hold. There has been, however, some pushback on spending related to projects that may have an unproven outcome or are more long term in nature.  Billing, rating and charging market outlooks remain healthy, driven in part by the need for real-time back office support for NGN services.  Policy management and better bandwidth usage tracking are increasing in importance driven by the ever increasing demands for bandwidth.  This has driven the shift from legacy batch oriented processes to a real-time services oriented architecture that will empower the CSP to make smarter business decisions.
 
Thirdly, the ongoing convergence of communications and media continues to highlight the fact that there is much integration work that needs to be done here to provide the customer with a rich user experience on both fixed and wireless devices.   Follow up discussions with media-centric panelists from Telemanagement World Orlando's New Content Value Chain track sessions all highlighted the exact same issue:  CSPs and media organizations are only JUST starting to begin more official conversations about how to work together, integrate service offerings, and create a robust customer experience that benefits both parties.  Many media organization are only just now accepting the fact that digital content distribution will continue to replace traditional content distribution channels.  From my perspective, the media and entertainment industry will need to rely on CSP's OSS/BSS business models and potentially even their infrastructure to help manage digital content delivery and revenue capture.   These requirements represent excellent opportunities for the technology community to help bring the CSP and media communities together from a service delivery perspective, demonstrate the needs for revenue management, partner management, and related delivery needs.   Let's just hope these companies can figure out the proper business structure and figure out how to work together effectively.
 
Signs like these demonstrate to me that the current communications market climate is showing resilience.  Even in a weak economy, it's important for all of us to ask ourselves several key questions: Are we ready to give up the Internet and related connectivity?  Can we live without our wireless device(s)?  Are we going to forego video services?   The current answer to all these questions is exactly what the CSPs and the telecommunications software community wants to hear.  That answer is "no" and  I don't expect that answer to change any time soon.