Arguably two of the biggest buzzwords of 2015 have been “digital disruption” and digital transformation”. We hear them a lot in the tech press and at telecoms conferences, usually in the context of OTT players encroaching on the telecoms sector in various ways - voice, SMS, TV, location-based services and even broadband data access.
Notice that the two terms go hand in hand. Digital players are successfully disrupting the traditional telecoms industry - despite the efforts of the latter to preserve existing business models - and that’s forcing telcos to transform themselves into digital service providers that can not only keep up with the changing times, but also take back the lead in defining or shaping that change.
One reason the OTTs have been so successful at disrupting telecoms is that it’s not just happening here: just about every business that relies on IT tech has had its world rocked by paradigm shifts in digital technology and consumer behavior patterns. Put simply, we are shifting to what analysts are calling the “digital economy”.
The good news is that telecoms is a key element of that. Analysys Mason defines “digital economy” as “a socioeconomic activity mediated by software and enabled by telecoms infrastructure”. That means operators can play and thrive in the new digital economy, provided they transform themselves into digital service providers (DSPs) that can compete in the broader internet economy, rather than inside the traditional telecoms silo.
However, that transformation requires a long-term plan and some fairly radical rethinks regarding business models and even organizational structure. Given the exponential growth of data traffic in the past decade, and the growth yet to come, much of the focus in telecoms has been on things like network upgrades and data centers, as well as moving infrastructure to a software-defined architecture. That’s understandable and a good start, but it’s only a start. Operators have to change the way they do business, end to end and top to bottom. And at the end of the day, it’s going to come down to the ability of the backend to keep up with their digital strategy.
Telecom Asia e-Brief: Digital transformation
Billing is key advantage
BSS has a reputation for being the unsexiest part of the telecoms business, despite the fact that it’s the part that enables service providers to make money. But as it happens, it’s the BSS that gives operators a key advantage over their OTT rivals, says P.S. Tang, founding director of Packet One.
“You can say that, yes, operators have fallen behind the OTTs, but they still have key strengths such as higher trust levels and a strong billing relationship with the customer,” Tang says. “Operators can make use of RCS and analytics platforms to build up the kind of infrastructure that OTTs have and provide a better user experience.”
Devid Gubiani, CTO of Bolt, adds that this is especially true in prepaid-dominated markets like Indonesia, where operators have the advantage of experience when it comes to developing new business models for customers who don’t have credit cards.
“The OTTs can’t do that,” he says. “For example we have companies like iFlix offering services in Indonesia, but it’s subscription-based, and you have to have a credit card to use it. Our strength is that we have a billing and charging model that is different from the all-you-can-eat model that enables OTT services.”
As an example, Bolt offers access to cable TV channels via its 4G network in one-hour blocks. “One hour of cable TV equals about 1GB of data, and we charge 90 cents for that.”