Arnd Baranowski, CEO of Oculeus, says the price and profit margins for most telecommunications services have consistently gone down to the point that today most voice-based services are mere commodities.
The same can also be said for most mobile and data services. In recent years, network operators have come under intense pressure to expand their capacities and support more and higher quality services. At the same time, new service providers are constantly entering the market with new competitive offerings.
These market conditions and the pressures they create will be driving the telecommunications industry in the years to come. In order to succeed in 2017 and beyond, telcos will need to rely on agile and efficient operations to access new market opportunities and continue to grow their businesses.
More competition in the business customer segment from OTT players
In recent years, OTT players have come a long way with developing services that are now seen as realistic and attractive alternatives to traditional providers of telecommunications services. More and more OTT players are now targeting business customers with mature service offerings that cover the enter enterprise. These OTT players have large marketing budgets that are influencing the market demand and are putting significant pressure on telcos, especially small and mid-sized operators.
These competitive pressures from OTT players are here to stay and will continue to intensify in the years to come. In order to cope with this pressure from the OTT players, network operators will need to improve the efficiency of their operations. At the same time, they will likely have to contend with reduced budgets and resources.
Operators will need to become highly agile and the support systems that they use will need to be efficiently adapted to the ongoing changes in market conditions. Adjustments to business processes will need to be implement rapidly and not take weeks and months as for change requests to be processed.
A better approach to combating fraud is needed
Telecom operators and other providers of voice-base services around the world continue to suffer significant revenue losses caused by fraudulent usage of their networks. Despite this is an ongoing problem, most operators do not allocate the resources needed to correctly combat fraud from happening on their networks. Most carriers are struggling to keep pace with the constantly changing methods and advanced technologies used by the criminals who commit telecom fraud.
Most fraud prevent activities used by service providers focus on detecting fraud only after it has occurred and revenue has been lost. These existing practices and tools are clearly ineffective and insufficient.
The consequences of fraud today have a larger impact on the profitability of operators than ever before as the prices and profit margins of telecommunication services continue to fall. This situation is causing a technological shift in fraud prevention efforts and systems. In 2017 and the coming years, the fraud prevention efforts will develop from detecting fraud after it occurs to preventing fraud before it happens and before revenue is lost.
Better margins with origin-based pricing
2017 will also see many service provide implement origin-based pricing in order to improve the margins on their voice calls. Origin-based pricing is an important new charging method, especially in the European Union. New European Union regulations require that all intra-European Union calls must be charged as national calls. In order maintain profit margins on calls originating outside the European Union into the European Union, telecom operators will be widely implementing origin-based pricing schemes. For instance, a call from Italy to Spain, which are two countries in the European Union, will be significantly less expensive than call from a country in the Middle East to Spain.
International wholesale carriers are effected the most by origin-based pricing. To succeed with this new charging method, international wholesale carriers will need to be able to efficiently update their pricing lists and create a mechanism in their OSS and BSS workflows and support systems to match traffic origins with the appropriate rates and surcharges.
Arnd Baranowski is the CEO of Oculeus, a provider of OSS/BSS solutions for telecommunications companies and mobile operators