knowledge centre

Within the past five years, as the rate of growth has decreased in the mature telecoms markets of North America and Western Europe but increased in the emerging markets of Eastern Europe, Latin America and the Asia–Pacific region, a new breed of major BSS/OSS providers has emerged. These providers are geographically co-located with their customers and provide a wide range of software services, including integrated BSS/OSS systems, built from the ground up and offered often in traditional licence form or as an SaaS offering. In particular, three regional players have burst upon the scene – AsiaInfo from China, Clarity from Australia and Comarch from Eastern Europe (see Table 1).

Table 1: Examples of all-in-one BSS/OSS vendors [Source: Analysys Mason, 2010]

AsiaInfo

AsiaInfo (www.asiainfo.com, NASDAQ: ASIA) was founded in 1993 in the USA, but moved operations to China in 1995. In 2000, it became the first Chinese technology company to list on the NASDAQ. With revenue of USD220 million in 2009 and a CAGR of 36% during the past five years, AsiaInfo has been named as one of the top ten fastest-growing technology companies by Fortune magazine. Its recent purchase of the second-largest SI in China, Linkage, for USD700 million, gives it more than half of the BSS/OSS market share of the Chinese communications service providers (CSPs).

The company provides IT and business operations consulting, software and IP network integration services to Chinese CSPs. It also has a full BSS product and service portfolio, with packaged applications in CRM, billing, business intelligence, service fulfilment and an SDP. In 2009, AsiaInfo made the Analysys Mason list of top global suppliers in customer care for the first time.

AsiaInfo implements the core BSS systems for 17 provinces of China Telecom, 20 provinces of China Mobile and 20 provinces of China Unicom.

In a recent meeting, Yadong Jin (VP, GM Marketing) and Kevin Ma (VP of Operations) described how AsiaInfo has become a "mini-Amdocs", with services and operations accounting for 90% and licensing accounting for 10% of revenue. It does not do outsourcing, for the most part, or managed services – but is an SI that offers custom software and provides ongoing services to operators.  Its focus, initially only on the Chinese market, is now expanding geographically, via the recently created AsiaInfo International in Singapore. It already has at least one other customer outside China, providing the billing and customer care for a China Mobile acquisition in Pakistan. It also has aspirations to expand further into the Asia–Pacific region and, eventually, global markets.

A recent stock market darling, AsiaInfo currently commands a market capitalisation second only to that of Amdocs in the BSS/OSS space. This provides AsiaInfo with a strong brand, access to capital for expansion, and enhances its ability to acquire partners and channels to further its global ambitions.

Clarity

Clarity (www.clarity.com, private) was founded in 1994 and is headquartered in Sydney, Australia. Tony Kalcina, currently Chief Product Officer, built Clarity around a vision of a unified operational management system for telecoms carriers. Clarity has moved inexorably towards its vision, powered by its decision to dedicate more than 80% of its staff to technical development, services and support. It is owned by the IT holding company, Powerlan Ltd, which acquired controlling interest in the company in 1999.

Clarity supplies an integrated suite of OSS modules that function together to provide network and service provisioning, assurance and several other operations functions. Built as a pre-integrated suite, Clarity OSS exhibits a common data model, unified mediation platform and common application infrastructure. Clarity aims to optimise its products for rapid implementation and to maximise integrated, automated operations in carriers. This solution is particularly compelling for CSPs that are seeking rapid implementation of multiple OSS functions, such as CSPs in emerging markets, or those that need to implement a major new service quickly using new network technologies that are not well supported in their legacy systems. Clarity has recently moved much of its customer base onto an SaaS model, providing it with a recurring revenue stream estimated to be over USD30 million per year.

Clarity has built on its integrated OSS product suite over several years. It is based on the TM Forum's NGOSS principles and the underlying database model is based on the TM Forum's Information Framework (SID). Clarity has gone to great lengths to explain its NGOSS alignment and call out the specific enhanced Telecom Operations Map (eTOM) processes that it supports.

Recently, Clarity has emphasised the value of integrated business intelligence as part of Clarity OSS. Most vendors have added analytics tools to their OSS and BSS products to help CSPs better manage the business covered by the OSS functionality. Such analytics tools are easy to use because the data under the control of the OSS is already defined. The scope of these tools is limited by the breadth of data managed by the OSS application. Because Clarity OSS has such a broad scope, its built-in analytics capabilities provide a rich business intelligence capability.

Comarch

Comarch SA (www.comarch.com, WSE: CMR) is a leading IT company in Central and Eastern Europe and a major supplier of IT systems and services to the Polish and overall EMEA markets. It serves the telecoms and financial services industries, governments, large enterprises and SMEs with telecoms-specific and IT enterprise solutions.

Comarch has been engaged in the telecoms market since the company's creation in 1993. Telecoms currently contributes approximately one-fifth of Comarch’s total revenue, which was estimated to be almost USD250 million in 2009. Comarch began with billing and customer care, first for carriers in Poland, but rapidly expanded to other markets.

Comarch offers a comprehensive suite of BSS/OSS solutions that addresses fulfilment, assurance and billing. The products use modern software construction and integration technologies and follow the general guidelines of the TM Forum, while the development processes follow ISO 9000 principles. Comarch’s BSS solution provides all of the functions that a retail, wholesale or MVNO would need to implement, manage and support its services and customers. Because of its broad IT experience, Comarch also provides related financial accounting software that it integrates with its billing solutions.

Recently it has gained more strength in service fulfilment – particularly with inventory management. As with most recent successful telecoms software vendors, Comarch offers a combination of software and services. Many CSPs turn to Comarch as a total solution provider. Comarch obtains about half of its revenue from services and about 12% from software sales of its proprietary software, the rest coming mostly from the resale of other vendors’ hardware and software.

Comarch is well known in Eastern Europe, but less well known in other regions. It is the leading telecoms software supplier in Poland. It has a major presence in many other Eastern European countries. It has some significant business in Western Europe, where its clients include: Auchan, France; Bouygues Telecom, France; dtms, Germany; OHG, Germany; T-Mobile, Austria and Germany; Telefónica O2, Germany; vistream, Germany; Vodafone, Germany and 6GMOBILE, the Netherlands. It has limited business elsewhere in the world, but has some accounts in the Middle East and in the USA and Central and Latin America, where its clients include: Belize Telecommunications, Belize; Cable Onda, Panama and du, the United Arab Emirates.

Analysys Mason analysis

The pattern of regional OSS providers that grow in their local environments and then expand geographically is not new. But, during the 1990s, most such vendors focused on a particular functional area – for example, billing, inventory, mediation or fault management. The products, very deep in functionality and moderately easy to integrate, were usually selected by CSPs on the basis of detailed technical and operational capabilities. Most of these ISVs were primarily focused on licence sales, leaving the bulk of the services to SIs, although some engaged more in configuration, customisation and integration efforts centered on their products.

In contrast, these new ISVs grew more from the IT side of the business, providing custom software development. Over time, they created more productised suites of pre-integrated software modules that focused on automating an overall process. Although any individual module might not necessarily be the best of breed, the overall integrated suite solved a significant operational problem for the emerging CSPs. Much of the basic telecoms expertise came from the eTOM, SID and NGOSS architecture from the TM Forum.

These regional players have now established themselves with major CSPs in their regions and have developed substantial experience in operations in emerging markets, where much of the next round of telecoms business and technical innovation is coming from. They have been providing local competition to the major BSS/OSS providers for several years and are now beginning to expand beyond their initial geographical boundaries.

In the next few years, these companies may well represent a new round of competitors for traditional software vendors in the global telecoms market. Companies such as Amdocs may be particularly threatened, because AsiaInfo and Comarch have the same approach of providing both software and considerable configuration and customisation services, and have the same main value proposition around integrating the BSS and OSS components to provide overall operations automation. In particular, emerging mobile markets may represent the strongest battleground, where deep product functionality is often valued less than lower prices and a reputation for serving these fast-growing CSPs.