OSS/BSS of a system (market of Russia)

Select two types of systems:

• OSS (Operation Support System) are systems which are responsible for interaction with the telecommunication environment: networks of telecommunication, a switching equipment, automatic telephone exchange, hardware complexes of ensuring communication, etc., intended for support of operation of telecommunication systems of telecommunications agency.
• BSS (Business Support System) are systems providing support of business processes of telecommunication operators, first of all – anyway closed on interaction with subscribers.

The functionality of OSS-and BSS solutions is often crossed and interpenetrates therefore in the market there is a set of integrated solutions. With respect thereto, for designation of total market OSS/BSS abbreviation, sometimes BOSS is used. At the international level TeleManagement Forum is engaged in standardization of the OSS/BSS systems and development of concepts of their further development.

2014

The OSS/BSS market in Russia in 2014 stagnated at the level of 34 billion rubles

The volume of the Russian market telecommunication solutions OSS/BSS for 2014 did not change and was, as well as in 2013, about 34 billion rubles, reported in a research of J'son & Partners Consulting company.

Two thirds of this amount, according to analysts, fall on expenses on support of the existing systems (OPEX), and annual purchasing amount new solutions OSS/BSS the Russian operators (CAPEX) does not exceed 8 billion rubles.

Such ratio of CAPEX/OPEX is characteristic practically of all world operators where about 40% of costs are the share of CAPEX. Nevertheless, experts omtechat, the structure of CAPEX/OPEX of the Russian operators is considerably displaced from the average world indicators towards costs for completions and maintenance of earlier implemented systems (for world operators the share of such costs makes 30–50%).

"It can serve as the indirect proof considerably to smaller effective management of the available park of various outdated IT systems (so-called Legacy or "legacy systems"). This circumstance raises the questions OSS/BSS transformation for domestic operators even more sharply. And not only there are studies of an evolutionary way traditional for all large operators but also migration options on new OSS/BSS stack" are considered, the study says.

If to speak about the general structure of the Russian market of telecommunication software, then the segment of BSS covers about 70%, and a segment of OSS – 30% of the market. About 80% of the market in terms of money are the share of operators of "Big Four" (MTS, VimpelCom, MegaFon, Rostelecom). The remained 20% are divided among themselves by average and small telecommunication operators.

At the Russian telecommunication operators in a segment of BSS the systems of billing and CRM are the most demanded. The major OSS modules are network management systems (Network Management, Inventory), including all planning tools and optimization of network (Planning, Provisioning, Network Performance). The remained market share is occupied by monitoring systems of performance (Fault Management) and also a perspective segment of quality management of service (Service Quality/Performance).

The main drivers of development of the Russian market by the OSS/BSS TV set are growth of a segment mobile BROADBAND ACCESS and new telecom segments (M2M BIBig Data/, financial services, Media), need for transformation of OSS/BSS stack of operators, including using "umbrella" solutions and also need of reducing costs for ownership of systems and increase in transparency, controllability and flexibility.

At the same time a number of factors contain market growth. The economic crisis, instability of ruble exchange rate, a sanctions regime have a negative impact; deceleration of growth rates of the Russian telecommunication market in general; presence at the Russian operators of the various multivendor park of outdated IT systems.

J’son & Partners Consulting also studied the solutions OSS/BSS market for telecom operators of other CIS countries. This market is estimated approximately at 30–40% of the Russian volume, or 14.5 billion rubles, proceeding from the fact that 60–70% of volume of the telecommunication market of the CIS countries are the share of Russia. OPEX/CAPEX ratio characteristic of the Russian market of telecommunication OSS/BSS is right also for other CIS countries. The structure of the market in general repeats the Russian: 2/3 markets in money are the share of a segment of BSS.

2013

Ecosystem of the Russian OSS/BSS market for telecommunication operators

The ecosystem of the Russian OSS/BSS market of telecommunication operators includes directly customers, the Russian and foreign developers and also integrators which play a binding role and have IT competences on customization, maintenance and their completion. At the same time often big customers (telecommunication operators) have the established relations with developers of solutions and integrators of partners. The general scheme of the Russian ecosystem OSS/BSS market of telecommunication operators is submitted in fig. 1.

According to experts of J'son & Partners Consulting, the Russian market distinguishes three key and, in many respects, contradictory, lines:

• escalating tendency to implementation in the large companies of expensive and powerful industrial solutions of foreign vendors;
• the aspiration of the largest holdings to provide a maximum of developments and acquisitions of telecommunication software from partner developers;
• preserving of a considerable share, even at large telecommunication operators, solutions OSS/BSS of own development.

Volumes and structure of the market in 2013

By estimates of J'son & Partners Consulting, the total annual amount of the Russian market telecommunication solutions OSS/BSS approaches 1 billion USD. However, its essential part reaching 200-300 million USD makes rather closed part of the market. It forms from services of partner developers and integrators, actually remaining internal (in-house) developments of operators. Thus, an available part of the Russian market of telecommunication software for which also a part of the Russian vendors in open competitive struggle can apply western makes about 750 million USD^[1]

It is important to note that 2/3 of them fall on OPEX, and annual purchasing amount new solutions OSS/BSS the Russian operators (CAPEX) does not exceed 240 million USD. If to remove from this volume equipment cost (to 30%) and project implementations (another 35%), then only about 55 million USD are the share of vendor sales of actually telecommunication software, taking into account a margin of all partners. Consultants of J'son & Partners Consulting estimate annual volume at such digit sold to solutions OSS/BSS for telecommunication operators in Russia.

Formation of the general structure of the market in terms of money taking into account that 2/3 markets create OPEX (license fees, the cost of completions, the upgrades, maintenance which are already set in solutions OSS/BSS company), is given in fig. 2 below.

If to speak about the general structure of the Russian market of telecommunication software, then the segment of BSS covers about 70%, and a segment of OSS - 30% of the market. At the same time, about 80% of the market in terms of money are the share of operators of "Big Four" (MTS, VimpelCom, MegaFon, Rostelecom) while the remained 20% are divided among themselves by average and small telecommunication operators.

As for the key and most demanded OSS/BSS systems among the Russian telecommunication operators, in a segment of BSS for them the systems of billing and CRM have paramount value. The major and most demanded OSS modules are network management systems (Network Management, Inventory), including all planning tools and optimization of network (Planning, Provisioning, Network Performance). The remained market share is occupied by monitoring systems of performance (Fault Management) and also the segment of quality management of service (Service Quality/Performance) growing now. �

Drivers and restraining factors of development

Drivers of growth of the Russian market of telecommunication OSS/BSS:

• Growth of a segment of mobile broadband access.
• Growth of new perspective segments: M2M, BI/Big Data, MNP/MVNO.
• Attempts of transition of operators to direct contracts with vendors.
• Perspectives of automation integrated by Tele2.
• Preserving of need for forward upgrade of solutions OSS/BSS of operators of "the big three" with the continuing growth of a segment of mobile broadband access.

Restraining factors of growth of the market:

• Presence at the Russian operators of the various multi-vendor park of outdated IT systems (legacy).
• Failure of Chief information officers to take responsibility for long-term projects.
• Deceleration of growth rates of the Russian telecommunication market in general.

The key driver of growth of the Russian market, according to consultants of J'son & Partners Consulting, is growth of mobile broadband access and also new perspective market segments, for example, of M2M or analytics on the basis of "Big Data". Preserving at operators of "the big three" of the need for permanent upgrade of the existing OSS/BSS of solutions and purchase of new is connected with it. Besides, integrated by Tele2, having incorporated mobile assets Rostelecom and Tele2 Russia, remains perspective big "window of opportunities" for vendors of OSS/BSS. It is known that the new operator during 2014-2016 is going to unify the business processes based on the general IT and telecom infrastructure.

Key restraining factor of development of the Russian market of telecommunication OSS/BSS is the large number of outdated IT systems of different producers which need to be supported. By estimates of J'son & Partners Consulting, on average each of operators of "the big three" has 100-300 different OSS systems and 50-200 BSS systems today. Such "zoo" of systems slows down development as time and implementation cost of new products considerably increase due to additional integration and completions. One more restraining factor is connected with personnel problems. So, average "term" does not exceed work on the Chief information officer's post in the largest operators in Russia recently 1.5-2 years in this connection often Chief information officers do not undertake difficult long-term projects, preferring implementation of a number of shorter projects. And, at last, deceleration of growth rates of the Russian telecommunication market becomes a natural all-market restraining factor of market development of OSS/BSS during 2014-2017. J’son & Partners Consulting predicts decrease in volumes of the Russian market of cellular communication by 1% a year throughout the period of 2014-2017. It will inevitably influence review of purchasing policy of the Russian operators towards sequestration of IT of budgets and optimization of the costs and as regards OSS/BSS.

Competitive landscape of the Russian OSS/BSS market for telecom operators

As a rule, the important advantage of the Russian developers OSS/BSS is narrow specialization on a BSS segment and in particular, on billing. It does not give them the chance to take part in tenders for deliveries of OSS solutions, but at this conjuncture and the aspiration of the Russian operators to be independent of solutions of one IT supplier, it is not a critical shortcoming. As a result the Russian billing firmly fitted into a telecommunication ecosystem of domestic operators. It is promoted as geographical proximity of the Russian developer to the customer, and understanding of specifics of business in Russia also by knowledge of all statutory requirements. Besides, the Russian developments are often more available at the price in comparison with the western analogs.

Strength of the western vendors is the wide portfolio of solutions of all stack OSS/BSS. These companies have broad world presence and hundreds of customers worldwide that gives the chance of synthesis of their experience and improvement of products. Besides, the leading world vendors have stable a financial position and are capable to invest heavily in R&D.

According to J’son & Partners Consulting, during 2014-2017 concepts of SDN (Software Defined Network) and NFV (Network Function Virtualization), automation of the perspective M2M direction (and both in OSS, and in a BSS part) and also growth of requirement at the Russian operators for monetization of data and payback of networks 3G/LTE will become the disruptive directions of market development telecommunication to solutions OSS/BSS in Russia. Separate tariffing of traffic on content type and the provided quality can become the most suitable option for this purpose, by experience of the western countries. It, in turn, imposes essentially new requirements not only to billing, but also to all stack of OSS/BSS systems.

Notes