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Innovation Opportunities Abound as CSPs Learn to Play to Their Strengths

Vanilla Plus

Vanilla Plus

May 13, 2013
Lucas Skoczkowski is chief executive officer of Redknee, the provider of real-time converged billing and customer care systems that has recently acquired the BSS business unit of network equipment vendor Nokia. Here, he tells VanillaPlus that after several years of concern over the threat posed by over-the-top service providers and third parties in the digital value chain, CSPs are identifying profitable new roles for themselves. By focusing on their capabilities in customer  experience and care and on their ability to charge for and support services, they can achieve success.

VanillaPlus: How is the continued rise in uptake of data services forcing CSPs to assess their  operations and businesses differently?

Lucas Skoczkowski: The rise in data services is affecting CSPs in several ways. Most prominently is the challenge to provide a better customer care experience for data subscribers - whereby customers are requiring more visibility of their usage and spend. We’re beginning to see CSPs take advantage of that need among subscribers by making more care channels available through applications for the iPhone or Android and greatly improving their online self-care offering, by making it mobile friendly. We’re also seeing some CSPs starting to integrate their care system on the back end and leveraging real-time systems, and therefore enabling their subscribers to utilise the selfcare channels to have access to the latest information. For example, if a post-paid subscriber receives a text from the CSP warning that they are about to exceed their monthly plan and offering them an upgrade to a better package, the subscriber will be able to check their usage and see any changes reflected in real-time. This emphasises the need for CSPs to greatly improve the care channels they offer to subscribers and to integrate these care channels with the back end billing and charging systems in real-time to ensure the latest information is available. 

From a tariff and offering perspective, CSPs are continuing to determine how to generate the maximum revenue out of the data they are delivering over their networks. The ability to intelligently package a new service or offering in a way that encourages frequent use of data is becoming more important. An example of this is roaming. Historically subscribers did not want to use data services when roaming because they were worried about the cost, but if CSPs focus on upselling and packaging roaming, subscribers will be more receptive and it unlocks additional revenue for the CSP.

Finally, the drive to have additional data services is complicating the wholesale revenue chain. CSPs have to think of new systems, models and capabilities to enable them to partner with over-the-top (OTT) providers. The value chain becomes more complicated when it comes to dividing up the revenue and making agreements because there are many different parties involved. CSPs need to simplify the process to be able to sign up more partners, deliver more data and different types of services, all of which require an intelligent billing system that enable services to be set up fast and revenue to be settled quickly with the partners.

The more innovative CSPs are looking ahead and making it easier for new partners to integrate with them. They are putting new billing systems in place to enable new revenue settlement, invoices and multi-party revenue agreements quickly. Overall the focus on data services is driving CSPs to make investment in their BSS/OSS and care infrastructure to support this capability.

VP: What do CSPs need in order to capture their slice of the growing cloud services opportunity?

LS: CSPs have some great technical capabilities in place that enable them to compete in the cloud market. Fundamentally to offer cloud services, CSPs have to wholesale cloud services provided by others or run these solutions themselves. CSPs are looking at both models and are setting up partnerships with software vendors and application providers to provide new services and in some cases to host and operate cloud services on their behalf.

CSPs need to have partnerships to keep up with the pace of the innovative cloud applications and services that are launching to the market and at the scale that is required. Gartner has predicted that there will be annual growth rate of over 16% in new cloud applications and services launching to the market in the next four years, and CSP’s will need to partner to deliver this market demand. We believe that the role of the CSP is to make it as easy as possible for software and application developers and providers to partner with them. CSPs can focus on billing on behalf of those application providers and can deliver innovative policy management in the network to provide differentiated quality of service for the different applications. CSPs have the necessary capabilities to package and manage real-time billing and customer care and in many cases are actually better positioned than non-telco cloud providers. For example, a CSP in Europe will be able to provide a better quality of service to a European customer than a cloud service provider in the US.

CSPs have the ability with some of these partnerships to leverage their investments and capabilities in billing and customer care and combine it with the applications available to offer great services, especially to the consumer market. For the enterprise market, CSPs have the experience of delivering a combination of network and IT services such as Microsoft Office 365 and configuration and management services. They can readily put together a good packaged offer of IT and communications services and targeting these at the SMB and corporate markets.

VP: How are CSPs refining their approaches to customer experience so they can meet the expectations of consumers? What systems and technology do they need to achieve this efficiently?

LS: A lot of CSP requirements centre on the systems that enable partnerships and new business models. A great set of self-care tools is a clear requirement. What we have seen in a number of markets is the power users or early adopters that start out using online self-care to access customer care, but as smartphone penetration has increased the expectation has passed on to rest of the consumer market very quickly. Now it is mainstream and some CSPs have some catching up to do.

eBay and Amazon have released applications that have been good at providing the purchasing and care experience on the devices. CSPs are investing more and more in these kinds of systems but it’s not just about having a good looking front end on the smartphone, it’s about connecting it in real-time to the back office and enabling the customer to have access to a full range of customer care from the device in the same way they would if they phoned a customer care agent. This is a really prevalent trend that we are seeing and it will continue to develop over the next few years.

Another trend that is developing quickly is the investment around social media that CSPs are making. People expect to be able to use social media tools as a way to engage with the service provider. Some CSPs are starting to use Twitter as a channel where tickets or issues can be raised from the mobile phone and a response will be provided by a customer care agent through the same social media channel. Redknee is working with Microsoft on leveraging the social media plug-in capabilities of the latest release of the Microsoft Dynamics CRM framework to be able to proactively search in social media for customer comments. We can segment more and more of the online customer experience within social media and actively engage through back office systems and tools in a very effective way. Though our recent acquisition of the Nokia Business Support Systems (BSS) unit we have rolled out our share@once product, which provides a full self-care portal within Facebook and is able to link a user’s Facebook profile, their key friends on Facebook, and the social media interaction with the CSP. We have been able to move the self-care experience from the mobile to social media where consumers are spending more of their online time. As well as customer care, CSPs are able to effectively utilise this transition for marketing new packages, promotions and new services to subscribers.

VP: The challenge isn’t all about new business models and new revenue opportunities. How are CSPs addressing the need to continue to improve their operational effectiveness?

LS: It differs from operator to operator but we see a couple of important approaches. We are seeing more and more operators trending towards integrated systems with well-defined interfaces and open APIs to make integration with partners straightforward.

Companies like Redknee are offering pre-integrated, end-to-end solutions across the back office to address most of the systems in a single solution and with a common product roadmap. The trend we are seeing is equally applicable in the smaller and larger CSPs. It makes operational sense to have a small number of vendors addressing their IT architecture.

Another aspect is the increase in outsourcing of back office systems. We’re seeing that specifically in CSPs that are taking advantage of cloud-based systems. We have launched a cloud-based Software as a Service (SaaS) converged billing and customer care solution for the US market and CIOs are willing to make use of cloud systems in parts of the back office – especially those who are themselves offering cloud-based solutions to customers.

VP: CSPs are seen as having been left behind by OTT players and other organisations in the digital economy. However, they seem to have become more confident about their role as enablers of the digital value chain in the last year or so. What will it take for CSPs to catch up and maximize their opportunities?

LS: It’s an interesting business to be in when you take a step back and consider how rapid the pace of change has been over the last ten years. I think perhaps we went through the initial period of those changes with questions about whether there was a role for CSPs. CSPs are now focused on identifying where they can add value. They are tending away from competing directly with OTT providers by offering some services and identifying where they can play and add value.

What is it they can bring to the table that others can’t? CSP’s are focusing on customer service and partnerships. There are really interesting and exciting things happening in the market. In the US, for example, CSP’s are actively addressing the M2M market by establishing partnerships with automotive manufacturers and in other verticals to innovate and make use of the data network and their location and billing capabilities.

Mobile operators are really bringing innovation into their business. In some cases, this innovation is turning into solid revenue streams. Back office systems need to be there to enable that platform for innovation to allow services to launch successfully and quickly and fail just as fast if things don’t work out.

I’m sure we’ll see a similar level of change in the next decade but we are noticing a lot more confidence and innovation among CSPs.

To read the article, please click here.


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About Redknee:
Redknee monetizes today's digital world. We provide a complete portfolio of mission-critical monetization and subscriber management solutions, including real-time billing, charging, policy and customer care modules, which allow Communications Service Providers to charge for things in new and innovative ways and create a unique user experience. Available on premise, cloud-based, or as a Software-as-a-Service, Redknee's low-risk, flexible solutions power more than 250 businesses across the globe. Established in 1999, Redknee Solutions Inc. (TSX: RKN) is the parent of the wholly-owned operating subsidiary Redknee Inc. and its various subsidiaries.

References to Redknee refer to the combined operations of those entities. For more information about Redknee and its solutions, please go to www.redknee.com.

For additional information please contact:

Redknee Solutions:
Michaela Radman, Corporate Communications
Michaela.Radman@redknee.com
+1 905 625 2190

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