Mohammed Sha

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European Union and BSS Centralization

Are there any parallels to be drawn?

When one hears the phrase EU in the telecom industry in Europe, one might typically think about regulations. But while reading the survey findings published recently by Telecoms.com, I was thinking about EU in a very different context – I was comparing the structure and politics of the EU with the concept of centralizing and standardizing business support systems (BSS) in large telecom operators.

The annual survey by Telecoms.com revealed that about 83% respondents from operators favored centralizing / standardizing group wide BSS. However, the survey also highlighted that the majority of the respondents flagged several concerns among which the most prominent was the hindrance that will be posed by internal politics or that opcos fear losing power to the central headquarters. Decades ago when the leaders of France and Germany were canvassing support for the EU, didn’t they face a similar concern from potential members? Isn’t this the concern long term members of EU including Greece and UK are still facing?

Some of the logic that was applied to convince European countries to join the EU seems to apply to the telecom world as well. Europe has a concentration of large group operators with operations spread in several countries, making them comparable to the EU which has several member nations. While member nations feared losing their sovereignty to the ‘supernation’ – EU, the Opcos fear losing their autonomy to the ‘superoperator’ - the headquarter (HQ). Yet some will argue that several EU members have benefitted from joining the EU; some nations saw trade benefits, increased tourism, reduced border control costs, etc. while others received generous funding for various developmental projects.

If Opcos can relinquish some of their power in a very calculated manner, they could benefit in several ways too. For instance, high value, frequently travelling corporate subscribers will be able to keep their spending within the operator confines rather than taking their custom to local competitors as they cross provincial or national borders. Opcos can stand to benefit from competitive barriers that will be created through superior customer experience delivered through brand consistency, convenience factor (i.e customers do not have to bother buying local SIM cards for better rates outside their home country), economy of scale across IT procurement, operations, bargaining power against various third parties including content providers, merchants, etc., and a lot more.

Indeed, just as the EU took away some powers from the member nations, centralizing BSS will take away some powers from the Opcos, but does not necessarily threaten their sovereignty. While the EU has implemented various policy frameworks to ensure reasonable independence to member nations preserving their sovereignty, modern cloud based architecture serves a similar purpose in the telecom world. It allows for the Opcos to continue having their incumbent systems, design and launch products and services specific to their local subscriber bases, etc. Yet, the multi-tenanted cloud based architecture allows the group HQ to ensure a common look and feel across all channels and all Opcos nationally or internationally; it allows them to launch group wide products and services in remarkably short time frames and a fraction of historic costs; it allows group wide performance management in real time allowing the HQ to re-balance budget or resource allocations between Opcos based on real time demand and performance; and a lot more.

While there are clear parallels to be drawn between the EU and Group telcos, EUs success is probably still debatable, and member nations like the UK and others are considering leaving the ‘supernation’. On the other hand, the concept of centralizing and standardizing BSS to unify large group operators ensuring the independence of Opcos, has been proven to work and seeing a lot more operators interested in the model. AsiaInfo-Linkage has implemented its Veris Billing solution in Asia and proved the symbiotic model between the HQs of two tier 1 operators and their several Opcos. It’s time operators in Europe replicate this proven success too!

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Mohammed Sha is the Director of Product Marketing at AsiaInfo-Linkage, the supplier of the world's most advanced software solutions and IT services to the telecommunications industry.