OSS BSS Solutions Market Growing Rapidly in India

The phenomenal growth in the Indian telecommunication industry has led to the increased demand for Operation Support System and Business Support System (OSS BSS) solutions. Decreasing Average Revenue per User (ARPU) in a predominantly pre-paid telecom market has forced Telecom Service Providers (TSPs) to look for alternate sources of revenue in terms of Value Added Service (VAS) and increase focus on customer satisfaction. They also have to meet increasing demand in IT requirement to cope up with rapidly increasing subscriber base. These factors have fuelled growth of OSS BSS solutions brought about by emerging services like Service Delivery Platform (SDP), which help in faster rollout of services.

The OSS BSS market registered 10-12 percent year-on-year growth for past five years, which is significantly higher than global CAGR of 6-7 percent. Frost & Sullivan's 2008 study on Indian OSS BSS market, expects this market to grow at 17 percent CAGR for the next seven years reaching a market size of US$1.51 billion by 2015 from current size of US$492.7 million.

In terms of business models, Strategic Outsourcing is the most dominating model currently followed by Business Transformation and Application Maintenance services. Out-tasking is not preferred by Telecom Service Providers (TSPs) and is expected to grow at a CAGR of below 5 percent, lowest among all business models. Functionality-wise Customer Management (Customer Relationship Management and Billing) contributes the largest revenue. While CRM is the most sought after functionality, billing contributes to 30 percent of Customer Management. Other significant functional areas are Network Management and Emerging Services including Service Delivery Platform (SDP).

According to Santosh Kumar Sinha, Industry Analyst, ICT Practice, Frost & Sullivan, South Asia & Middle East, "Requirement of OSS BSS solutions is expected to continue in the future with further refinements and innovation in engagement models. More IT vendors will engage into revenue sharing models increasing competition in this market. They will do well to keep an eye on requirements of TSP and customize their offerings as per those requirements."

Scalability of IT systems is major concern and most significant requirement for any TSP in India. Thus they like to go for outsourcing of end-to-end systems rather than out-tasking of selected functionalities as practiced in more developed markets. Coupled with a paucity of funds, this is the most important factor in emergence of Strategic Outsourcing, based on a revenue sharing model, as the most practiced business model in India. Frost & Sullivan predicts that new players will ink outsourcing deals worth USD 2 billion with IT firms and will change the market share of IT service providers significantly in the near future.

Customer centric approach by TSPs is the major force behind growth of Customer Management systems, while scalability is the most sought after requirement from any OSS BSS solution. The trend is expected to continue in future with entrance of new TSPs, rollout of 3G and Mobile Number Portability (MNP), which will further intensify competition.

Posted to the site on 7th August 2009