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Existing Billing and Back Office Systems Cannot Support New Telco Strategies – It's Time for a Transformation

Akil Chomoko

28 June 2023

Communications service providers (CSPs) around the world are on a journey toward digitization. They are transforming their businesses to decrease their reliance on commoditized connectivity as the main driver of revenue and to pursue opportunities to introduce new products and services to consumer and enterprise subscribers. In recent years, they have made massive investments to build programmable 5G networks. Now is the time to recoup.

But, even as connectivity demands explode, most CSPs are only seeing around 5% growth from traditional core services. It has become evident that return on investment and appreciable future growth must come from new forms of monetization and new lines of diversified businesses. Perhaps that is why 77% of 50 senior telco executives surveyed said their companies have embarked on at least five new business-building initiatives in the past 10 years, according to a McKinsey study.

As this realization has taken hold, CSPs are primarily pursuing revenue opportunities in two distinct ways.

In the first case, the provider is offering its network “as-a-service” to connectivity-dependent businesses or resellers that need a certain level of dedicated, specialized, or customized connectivity. This could include telehealth companies or autonomous vehicle manufacturers for whom a certain level of ubiquitous or low-latency connectivity is an absolute requirement. In this scenario, the business curator defines their needs and the CSP delivers the network to accommodate.

In the second case, the CSP itself builds and rolls out new digital services, going so far as to create standalone business units within the organization. The network is then configured to support the new offerings. Telstra Health is a classic example of this paradigm in action. The Australian CSP has launched a dedicated health solutions business unit for hospitals and health service organizations and pharmacies, and they are reaping the financial benefits.

In both scenarios, it is the applications that define what the network needs to do, effectively spinning the traditional business model on its head and prompting the need for a complete change in structure for network operators. Expansion into new services means new product skews, bundles and promotions, customer support requirements, and personalized marketing initiatives, to name a few. Networks need to be accessible to and programmable by individuals outside CSP halls.

As one might expect, the implications for back-office systems are significant.

CSPs have spent millions on existing BSS systems that support core service offerings. These on-premises systems are often inflexible and built exclusively for legacy services and monetization approaches. As such, they lack the agility and scalability to support non-traditional services that, in many cases, will be accompanied by new, more complex and adaptable pricing models.  

At the same time, as CSPs stand up smaller business units or support the unique needs of individual companies, they cannot afford to spend millions more on a similar BSS solution for each new product or service. Retrofitting existing systems is not an option either. A more agile and configurable solution is required.

The good news is that digitizing CSPs need not engage in costly, resource-draining BSS overhauls or wait for the conclusion of long-term contracts with their legacy solution providers to modernize and upgrade their back-office structure. Cost-effective, best-of-breed, cloud-based platforms can sit alongside legacy systems and provide the agility these operators need right now to begin monetizing new services.

Historically, CSPs have looked and operated in a very similar fashion to one another, marketing and selling connectivity services within their respective geographic footprints. Going forward, as operators pursue new monetization strategies featuring home security, IT, financial, and a host of other services, the differentiation will become more apparent. As CSPs continue to embark on this multi-industry strategy, securing the right back office technical capabilities will become a critical determinant of success.

Learn how Aria can support your BSS transformation

Akil Chomoko

VP Product Marketing, Aria Systems. Akil leads solution marketing at Aria, building go-to-market strategies and programs in key target industries. Akil has over 20 years of experience in the telecoms industry, serving most recently in senior product marketing and management positions at MDS Global, AsiaInfo and CSG (Intec & Volubill).

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