On 2007 revenues and expectations from 2008

2007 saw a significant surge in revenue growth from OSS/BSS solutions for the industry as well as Aricent. We registered an impressive double-digit growth in revenue from this segment. We believe 2008 shall see the similar trend owing to large-scale OSS/BSS transformations and new service deployments worldwide.

On major market segments

• Existing operators looking for OSS/BSS transformation either to accommodate subscriber growth or venturing into multiple technologies

• Greenfield operators who have recently acquired licenses for network deployments

• New breed media, entertainment companies and MVNOs

• Global operators/OEMs wanting to enter India/Asia but looking for local presence through partnerships

• OEMs offering new OSS/BSS products to CSPs and requiring OSS/BSS R&D services

On total installation base of OSS/BSS solutions in the country

Accurate market figures can be accessed through industry research reports. Aricent's OSS/BSS practice ranks among the top tier in the Indian market. Our Active mediation system caters to roughly 65 percent of all network traffic carried on various networks across India.

On growth drivers and prospects

Some of the major factors driving OSS/BSS market are -

• Unprecedented subscriber growth rate has increased the need for OSS/BSS to scale and achieve higher benchmarks

• Regulatory bodies such as TRAI and DOT are playing a critical role in mandating new services and mechanisms of fair-play that have increased the pressure on operators to upgrade/migrate to new OSS/BSS

• The rise of greenfield operators and diverse communications companies such as media houses, entertainment companies and MVNOs has increased the demand for OSS/BSS

• Reducing operating expenses through OSS/BSS transformation and process adaptations

According to Gartner, the global OSS/BSS market has been growing at a CAGR of 6-7 percent in the past five years. However, the Indian OSS/BSS market has grown much faster than this (approximately Rs 5 billion in 2006-07). This trend is likely to continue for the next 5 years. The mobile subscriber base (CDMA+GSM+WLL) will continue to be next only to China in the near future and this will have an indirect impact on the demand of OSS/BSS.

On new and emerging technological platforms

India is very much in-tune and maybe ahead in some cases with regard to new and emerging technological platforms in OSS/BSS. This is also attributable to the fact that the FMC revolution in India is driven largely by mobile network proliferation as compared with the more industrialized regions of the world that had already invested heavily in fixed lines. So, the R&D cycle in India has been oriented more towards newer mobile technologies as opposed to the lagging fixed line infrastructure in the country. Next Generation services like WiMAX, IPTV are seeing the light of the day sooner than in many other parts of the world. Hence, all the new world class OSS/BSSs are similar to the ones available anywhere else.

On challenges and opportunities

The domestic Indian market is dominated by MNC vendors while the Indian vendors are focusing on the international market. So, in order to be successful in the Indian market, these vendors need to differentiate their offerings from competition. The vendors are also often not equipped with the right capabilities (resources and infrastructure) to execute complex and large projects. However, there are a large number of opportunities that have sprung up in the Indian market -

• A large number of greenfield operators have acquired spectrum licenses for deploying and operating new networks. This provides a good opportunity to Indian vendors.

• A whole new breed of communications companies like media, entertainment and MVNOs have evolved offering new avenues for OSS/BSS vendors.

• Many existing operators are looking at venturing into multiple technologies; for example CDMA operators have also started to acquire licenses to offer GSM services. This creates new requirements in the market landscape for OSS/BSS vendors.

• The Indian operators are also looking to get into long-term relationships with large vendors who could either themselves, or through integration partners, provide managed services. This not only saves costs for the operators, but also frees them from handling multiple vendor relationships by having a single interface. Managed services make for a big opportunity in India.

On complexities

The OSS/BSS market in India is witnessing an upswing driven by increased network requirements of the service providers/network operators to offer value-added services to attract and retain their customer base. The regulatory bodies are also contributing to the proliferation of innovative feature-rich customer applications by making it mandatory for service providers to offer it to the masses. The industry movement for fixed mobile convergence and bundled service offerings has created a need for convergent systems that can easily scale and accommodate all new generation services. Operators increasingly want a single point of accountability for their OSS/BSS implementations to reduce risk. This in turn has driven demand for Indian SIs and OSS/BSS vendors who can be the prime supplier for the entire OSS/BSS.

On key factors for success of OSS/BSS vendors

Cost advantage is still one of the important factors defining success for domestic OSS/BSS vendors in comparison with others. Domestic vendors are also increasing their footprint in the global economy and this has helped them improve their list of client references through innovative onsite, offshore and near-shore delivery models.

On consolidation of legacy systems

Operators often find themselves in a quandary with regard to the uncontrolled proliferation of their management systems such as NMSs. The large number of legacy systems puts considerable strain on network performance and increases costs. These systems also make it virtually impossible for the network to support the roll-out of new services. Hence there is a need for simplifying and consolidating legacy systems and making them capable of supporting the operator's strategic goals.

On impact of OSS/BSS on QoS

Quality of service (QoS) is an important differentiating factor that has gained imminence for service providers. The OSS/BSS industry is responding to this urgent need of the service providers by providing robust solutions to cater to existing and future network transformational requirements. The importance of OSS/BSS solutions to service providers has increased dramatically in the past few years. This is because OSS/BSS plays a critical role in reducing service providers' operating costs.

OSS/BSS solutions have also helped in enabling data intensive applications such as IPTV that require a certain assured level of QoS.

On basic requirements

The billing industry is moving to what are known as the next generation billing platforms. Such systems offer a convergence of pre-paid and post-paid billing modes. These systems not only cater to voice based calls and applications, but also to the new paradigm of non-voice based data intensive applications (e.g. IPTV) to offer greater flexibility in rating and charging to the service providers.

With the advent of triple and quad play services in India, the challenges for billing platforms has increased manifold. There are multiple participants involved in a broader content supply chain. The billing systems are understandably becoming more customer-centric rather than service-centric to support this convergence. Billing systems have to keep pace with these requirements.

On your company's plans for India

We are already a strong player in the Indian communications market. Our Active Mediation System and Service Provisioning platform has been deployed widely in most tier-1 operators in India. In fact, our Active Mediation System carries roughly 65 percent of all India network traffic. We have also launched our Near Real Time Roaming Data Exchange (NRTRDE) system in the Indian market, implementation of which has been mandated by GSMA for all mobile operators by Oct. 01, 2008. Apart from our solution frameworks, we have also recently introduced a bouquet of Managed services for the Indian market (coinciding with the worldwide launch) targeted at CSPs and OEMs. We also plan to rollout our Mobile Number Portability (MNP) solution in the coming days.

On your offerings for the Indian telecom service providers

Lifecycle Services - This includes business and strategy consulting, software product design and development services, IT transformation and maintenance services, and end-to-end testing services.

Systems Integration - We offer end-to-end or niche SI through best-of-breed COTS solutions and Aricent's own solution frameworks (including Aricent Active Mediation, Service Provisioning Platform, Online Charging and Control System, Revenue Reconciliation System, and the Near Real Time Roaming Data Exchange - NRTRDE - Systems).

Managed Services - Our managed services portfolio for service providers includes feasibility/assessment consulting, operations management services such as Billing and Service Activation bureaus, and managed testing services.

ARICENT has more than 400 clients worldwide that include Airtel, Alcatel-Lucent, AT&T, BSNL, Idea Cellular, Inmarsat plc, Juniper Networks Inc., Motorola Inc., MTNL, NEC, Nokia, Samsung, Sony Ericsson, Sprint, Texas Instruments, Verizon, Virgin Mobile, and Vodafone.