With democratizing access to technology, more and more people are embracing it and telecom is one of the industries which is most affected by this shift. More and more people will have mobile by 2020 and the amazing thing is the revenue of this user acquisition will be driven by data consumption as compared to voice/SMS or other traditional services which were the base of telecom offering till recent time.
Operators are sensing the shift happening in the user choices and trying to figure out ways to stay in the competition. Mobile broadband connection to increase from 55% of the total in 2016 to 73% by 2020. The number of smartphone users will reach 5.7 billion by 2020 which means more and more people will be using data as a telco service and be a part of the digital ecosystem. Mobile data is expected to grow at a CAGR of 47% till 2020.
If we see the driving factors behind this shift, OTT, content and other digital service providers have played a major role. See the below graph on how the composition of services has changed over time.
It’s not only the addition of new partners to the digital ecosystem, but the traditional wholesale is also evolving. Here are the new trends which we can see happening in wholesale.
Implications on Telcos due to digitalization
Telcos no more work in silos as they are disrupted by the new age service providers hence looking for new partners to offer competitive and exciting services to its consumers. The below chart shows the changes happening in the telecom industry. This is forcing telcos to search for innovative and unique economic models.
New Possibilities for Telcos
These trends have opened a lot of possibilities to explore additional business avenues and try new economic models. The telco revenue mix is also changing with the partner mix as we can see in the graph and it is impacting the way telcos operate and manage partnerships in a traditional format. Hence the partner lifecycle management is also becoming imperative for telcos to embrace the digital revolution. For example, there will be 25 billion connected things by 2025 with enterprise verticals as the main drivers. Blockchain in telco has so far been limited to roaming but experimentation could take this further, especially if eSIM came to smartphones.
Smartphone connection will increase to 79% of the total mobile connection bringing in new customers. Over a fifth of the world’s markets will have launched 5G by 2020, spending a combined $244 billion on networks in the process which will bring new capabilities for telcos.
How Telcos can Embrace Digitalization Successfully
The need of the hour is a unified solution which can cater to all the requirement of the ecosystem. The system should be able to provide visibility for everyone in the ecosystem to establish trust among the partners. Right from efficiently managing the partner onboarding, to partner settlements and dispute management, the system should be able to make the whole journey seamless for both traditional and digital service partners. The below image shows some of the capabilities of the system.
This unified solution will allow telcos to transition through the changing paradigm and add agility and scalability to the business to embrace any new technology and consumer behavioral shift.
To learn how telcos can leverage partnerships to gain competitive advantage
Sunay currently serves as the Product Director of Partner Management portfolio at Subex. He specializes in Telecom Partner Settlement, Digital Billing, Route Optimization and Interconnect Billing. He has 12+ years of experience in the Telecom Industry. He is also a keynote speaker in forums like GSC and an active contributor to online forums related to partner settlement.
Converged partner management is a unified solution which caters to the entire gamut of partner needs of a telecom operator. The platform addresses the needs of both traditional and digital partners by spreading across different domains and helps to handle the complex relationships between the suppliers and vendors of the telecom operator.
Why you need a Converged Partner Management Solution
Over the last decade, digitalization has transformed the communication service provider (CSP) landscape. It has created a need to achieve market differentiation in response to the evolving customer profiles and prevail over emerging challenges from disruptive services. Telco revenues from legacy voice and SMS are on the decline and there is high CAPEX associated with network innovation. Telcos can turn this around by evolving as Digital Service Providers (DSPs). But the biggest challenge in this transformation is to bring both traditional and new digital partners together to create an integrated industry specific solution. But the success rate of these partnerships and integrations is very low as it comes with multiple challenges. Inefficient partner onboarding process, tariff management for multiple plans, billing and invoice reconciliation while taking OPEX into consideration. Based on a research 70% of partnerships fail due to trust and clarity of business relationships. There is a need of sustainable partnerships which can create value for everyone in the ecosystem.
In this scenario, a converged partner management approach proves beneficial from both business and service perspectives. From the business perspective, a converged platform will help to visualize the partners’ business. It will consolidate partners into a single contractual binding and bundle the offerings, settlements, and payments across the entire domains. A converged partner management solution packs features that give CSPs freedom to experiment with NGN service offerings such as content management without having to worry about the scalability of its billing function. The solution enables telecom operators to have all their business partnerships in one single place and makes it easier to access information and make efficient business decisions. This is especially important as different partners insist different models in measuring the business impact and ROI.
How to Choose the Right Converged Partner Management Solution
Selecting a partner management solution to manage your partnerships efficiently is not an easy decision. The solution should complement the operations of the service provider and offers features and functionalities that remove operational errors and smoothen the partner management process.
Below are the key features you should look for in a Converged Partner Management Solution
Partner Self Onboarding: The partner onboarding platform can support self-boarding, manual onboarding and in some cases, a mix of both. The self-boarding platform will play a significant role in the digital era, giving the DSP the ability to perform most of the onboarding activities by automating the process like partner scoring on configurable KPIs and other partner details.
Partner Scoring- Pre-Onboarding & Post Onboarding: Partner scoring can assist an operator to take pre and post onboarding decisions based on business KPIs, and this can be combined with standard agreed contracts to make the complete process automated.
Defining the Partner Business: Defining the businesses of both traditional and digital partners is a complex process especially in the context of service offerings, revenue sharing and service agility. The business for traditional partners such as interconnect revolved around exchange of voice, SMS and usage of other services so the contract includes bilateral deals for settling the traffic and event rates. On the other hand, contract with digital partners like OTT players, content providers, VAS companies, MSOs, integrators, app developers, IoT and M2M service providers involves complex revenue sharing model as the settlement may be based on usage of resources, impressions/ clicks on the website, readings from metered equipment, among others. A converged partner management solution will help telcos to implement revenue sharing models that can be fixed, shared or a hybrid depending on the nature of the partner business.
End-to-End Billing and Settlement: Helps the business to define rules and apply them to the events acquired to generate the final revenue figure to both the DSP and the partner. The system achieves this through accurate rating and charging, real-time updates, and on-time bill and statement generation.
ETL (extract, transform, load) to Track and Process Events: The ETL tool is required to process different types of events from various sources and transform them to respective entities by extracting the relevant information. Considering the dynamic and open nature of the DSP ecosystem, the ETL tool should be flexible enough to handle the frequent onboarding of new partners and build mediation capability supporting ingestion and normalization of data from multiple partners in different formats.
Partner Communication and Self-Care: A converged platform should enable a consolidated communication portal to manage all the operational aspects of the business including contractual updates, bills, settlements, credit debit notes, trouble ticketing, and dispute management. The portal should also be integrated to the backend systems to orchestrate each operational aspect towards the respective system for action and resolution. Finally, it should feature open APIs that enable quick integration with third-party systems.
Visibility of Partner Business: Real-time visibility ensures transparency across the businesses. Through real-time analytics of reports, alerts and notifications, the converged platform can enhance the visibility and reporting across different channels.
Are You Ready?
New age partnerships require transparency and trust between the partners to create a robust ecosystem. A Converged Telecom Partner Management solution will help telcos to manage these new age partnerships efficiently and enable them to drive new business models. This will also reduce the time to market for new offers and packages and allow telcos and partners to acquire new customers and add new revenue streams.
Are you ready for a converged partner management solution to succeed in the new age digital ecosystem?
Sunay currently serves as the Product Director of Partner Management portfolio at Subex. He specializes in Telecom Partner Settlement, Digital Billing, Route Optimization and Interconnect Billing. He has 12+ years of experience in the Telecom Industry. He is also a keynote speaker in forums like GSC and an active contributor to online forums related to partner settlement.
The Fourth Industrial Revolution has dynamically altered the global communications landscape, creating both challenges and opportunities for communication service providers (CSPs). Consumers have become increasingly demanding with respect to consistent experiences across multiple devices, and CSPs are gradually transforming into providers of advanced digital services such as bundled broadband, mobile apps, and interactive customer-centric content. This transformation into a digital service provider (DSP) is not easy and CSPs are fraught with multiple process and software challenges during this shift.
Moving from Interconnect Partnerships to Strategic Partner Management
In an intensely competitive market, CSPs face immense pressure from over the top (OTT) content providers such as Google and Facebook who have direct consumer outreach. Provision of more customized, automation enabled services through large partner ecosystems is the norm. The increasing complexity of emerging markets coupled with initiatives such as smart cities will open big digit growth opportunities capable of being handled only by huge curated partner collaborations.
Earlier, telecom operators entered into interconnect partnerships with other telecom operators mostly to leverage mutual networks for voice and messaging services. However, the proliferation of smartphones and high-speed internet services has led to a burgeoning increase in the number of partners providing a diverse range of services, leading to a shift from conventional interconnect systems to complex partner management relationships.
The Partner Management Market Is on an Upward Swing
And rightly so, considering there are about 23 vendors offering a certain level of partner management functionality globally. According to analysts, the partner relationship management market (including software and services) is estimated to stand at US$ 850 Million today and is projected to increase to about US$ 1.65 Billion by 2023[1]. The entire ecosystem is expected to undergo certain strategic functional shifts, industry and geography notwithstanding. The coming years will witness new buyer personas across diverse channel types – and channel sales and marketing professionals will realize the importance of third-party influencers in reaching new buyers. The thrust will be on providers of partner management solutions to function as trusted partners – helping widen a brand’s outreach and influence the success journey in unimaginable ways.
The need for Converged Partner Management
The telecommunications wholesale market is growing rapidly with fierce competition and dwindling profit margins. Given the enormity of transactions and immense complexities surrounding a multi-party ecosystem, it is necessary to adopt effective partner management solution to ensure better service quality levels.
Rohan currently serves as Principal Consultant covering Business and Solution Consulting. He specializes in Telecom Billing domain including Retail Billing and Partner Billing. He has 13 years of experience in the Telecom Industry. He is also a tmforum Career Certified Business Development Manager. He carries wide variety of experience across the world with different telecom operators.
The telecommunications industry has been evolving over the years in this digital economy through technological innovations. The shift between the generation of networks is progressing swiftly, and that sees an impact in business use cases and the BSS/OSS systems that are part of this ecosystem. While there is a huge buzz about 5G today, the 4G rollout is still in progress in certain regions. 5G has opened a host of new business opportunities with augmented reality, self-driven cars, transforming healthcare and more. With this unprecedented pace and agility in the business, partnerships play a very significant role for Communication Service Providers (CSPs), and they need to be well equipped to manage complex wholesale contracts to succeed.
Want to manage your digital wholesale contracts effectively?
Here are the 5 drivers for CSPs to sign contracts with innovative economic pricing models:
1. Changing Ecosystem of the Telecommunications Industry
The telecommunications industry is experiencing a radical shift in the current scenario with multiple partners in the digital ecosystem. A CSP is no longer isolated in the market, but an integral part of a vital ecosystem. They are collaborating with different vendors and partners to provide differential products, innovative content for new age digital services like on-demand audio and video streaming. All of this puts the CSPs at the crux of all the action. With robust infrastructure and ability to process data in huge volumes, this is a unique position that can be leveraged in this changing scenario.
2. New League of Customers and Partners
The changing dynamics in the industry has given rise to a new league of customers who are aggressive and precision-driven. There needs to be transparency in every aspect of the business. Contract timelines are getting shorter and demanding, while CSPs’ business models have not adapted to meet these demands.
Partnerships are very varied, as the demand for better and more innovative content keeps growing, and this could range from a channel, a gaming company to an individual content creator. Strategic partnerships are key, and transparency is essential here as well. With non-traditional partners for these newer types on content, the business model needs to be adaptive and responsive.
3. Embracing Digitalization
Gone are those days when CSPs focus on merely exchanging rate cards among partners to bill the usage of services. Pricing has become increasingly competitive. Margins are shrinking faster than new business CAGR can grow. Realizing returns is taking a longer time than usual. So, how is the market reacting? Well, the reaction has been to explore unconventional contracts that are driven by data volumes. The complexity of rating has increased in digital contracts with tier/ slab ratings, exclusions/discounts, and commitments.
4. Content is the King
Bill Gates wasn’t wrong in the late 90s when he wrote a paper predicting how real money will be made by sharing content online. Last decade has seen massive foray by CSPs into the content space under the pretext of diversification. Few years back, NBC Universal (acquired by Comcast) and Time Warner Cable (acquired by AT&T) were seen more as a change for the video market than for telecommunication. But with new digital technology to distribute content, and not just traditional media channels, CSPs have gained prominence there. CSPs are partnering with the OTT players to provide exclusive content and niche audience services in the form of premium bundles. Operator-led OTT subscriptions have become the new business model driving the revenues through targeted customer segments.
5. Rise of Edge Computing
With billions of IoT devices expected to be in use globally in the coming years, Edge computing will play a critical role in taking the advantage of high-speed data connectivity. Partnerships will become vital with increased collaboration of vendors in the areas of edge devices like sensors, storage, compute & power, etc. CSPs will become the backbone of this network by providing the required connectivity to all partners involved in the ecosystem.
The last 5 years have been crucial for CSPs in transforming into digital service providers, and this has opened a whole lot of new business opportunities and challenges. Digital transformation had been the buzz word in the industry for almost a decade. In hindsight, it is just an enabler and real transition happens only when organizations embrace & evolve with it.
If you are interested in knowing more about managing complex wholesale contracts
Debolina is a seasoned professional who specializes in Telecom Partner Settlement, Route Optimization, Interconnect Billing and Order Management/Provisioning. She has over 10 years of experience in the Telecom industry and has a vast exposure to customers from all regions. Debolina currently works as a Technical Product Manager where she manages the product management for the Cost Analytics Portfolio of Subex. She is an active contributor on various forums like Actuate, QlikTech, and is also a voracious reader and an active blogger.
Sunil Subrahmanyam is a Consultant in Subex’ s Business & Solutions Consulting vertical, focusing on the area of Partner Management in Emerging Markets. He has over 3+ years of experience in Telecommunications & IT industry with key focus on Revenue Assurance, Risk Advisory -Telecom, Business Intelligence & IT transformation. He is a TM Forum certified Revenue Assurance Practitioner and had previously worked with Cognizant and Tata Consultancy Services.
Digitalization has opened a plethora of opportunities for Communication Service Providers (CSP) across the globe to transform their traditional service offerings, moving from telephony into content-driven businesses and reaching the status of Digital Service Providers (DSP). There is a paradigm shift in the telecommunications ecosystem with the entry of technological disruptors (like OTT players) resulting in a portfolio of services with competitive pricing models. The depletion of voice revenues and the rise of data services has changed the dynamics of business partnerships.
The traditional telecom service provider is no longer isolated in the market and has multiple collaborations for audio, video, content, analytics, cloud, etc. Furthermore, due to shrinking margins, operators are looking forward to having contracts/agreements with their vendors and partners, which will create a win-win situation for the parties involved. According to a recent survey by TM Forum, DSPs have a revenue opportunity of around $142 billion from digital services. Whether it is AT&T acquiring Time Warner for $85.4 billion or Reliance Jio integrating with Saavn to create JioSaavn app, telcos are looking to roll out exclusive content to their end customers. Considering that there is much to gain, a DSP without a strong content offering in today’s scenario is almost unimaginable.
A DSP often has hundreds of content provider contracts (mostly with aggregators) to manage, and there is a huge diversity of partners ranging from a garage developer to the likes of Google.
Building success factors:
The phenomenal surge in data consumption by subscribers and free content is driving the majority of telcos’ core businesses today. In addition to this, few telcos are partnering with OTT players to provide exclusive content and niche services in the form of premium bundles. Operator-led OTT subscriptions have become the new business model driving revenues and customer segments. Source: IHS Markit
Driving new business models – The increasing level of complexity
Initially, rate cards were exchanged between partners for billing the usage of services. Later they entered into bilateral agreements to settle the revenues between them. Now, telcos are moving to digital contracts by partnering with content providers and other OTT players. These digital contracts involve tier/slab ratings, along with exclusions/discounts. Commitments and rating based on specific parameters have increased the level of complexity with respect to rating and charging their partners.
Let us go through 3 types of agreements that are executed between partners these days:
There are several agreement scenarios (deals) between the operator and content partner based on different business models. Furthermore, revenue sharing models have been evolving from fixed % based to a tier/slab-based approach across product scenarios.
1. An agreement based on new subscriptions
No of New Subscriptions Revenue Share
0 – 500 P %
501 – 2000 Q %
2001 and above Q % and additional T % for no of subs >2000
As per the partner agreement, if new subscriptions are negative for a particular month, no pay-out will be made to the partner for that month.
2. An agreement based on promotions
Revenue sharing between the parties will be on a monthly basis. The promotion period can be for a few months or it can be ongoing. If the user subscribes to the content for
Months Revenue Share
1 month P %
2 months Q %
3 months and above R %
3. An agreement based on market penetration
In this scenario, the operator is liable to share the revenue based on the penetration of subscribers in an area. The complexity involved here is that the penetration level of each market is different from the other. In addition to this, there are certain areas where the radius is defined with respect to a landmark. Subscribers within the radius will be charged a premium and accordingly the revenue share.
In today’s competitive market scenario, partnerships have become the need of the hour for telecom operators and they are moving ahead by signing innovative and complex contracts. The above mentioned examples of digital contracts/agreements are a few models that we have recently dealt with. In the future, we will see many such models with increased complexity and innovative digital contract definitions.
If you are interested in knowing more about managing complex wholesale contracts
Have you negotiated or signed any complex contract recently? Let us know in the comments section below. Looking for partner who can help you handle complex contact? Talk to us.
Sunil Subrahmanyam is a Consultant in Subex’ s Business & Solutions Consulting vertical, focusing on the area of Partner Management in Emerging Markets. He has over 3+ years of experience in Telecommunications & IT industry with key focus on Revenue Assurance, Risk Advisory -Telecom, Business Intelligence & IT transformation. He is a TM Forum certified Revenue Assurance Practitioner and had previously worked with Cognizant and Tata Consultancy Services.
Ever guessed who will be your next partner in wholesale, digital or OTT? Seeing the pace at which partnerships are burgeoning across the length and breadth of the industry, it seems you won’t get an easy answer to this question. In this rat race, growing partners is the need of the hour, and that too across categories of entertainment, security, gaming and more; there won’t be much time to analyze the partner’s background or work on the business logic. But you are confident that your digital journey is on track, with newer business and revenue opportunities.… Hurray!
Now, things turn upside down when you realize after a few days that there’s a difficulty with managing the partner account, faulty content delivered to subscribers, disputes arising from agreements, or you find out that there’s a serious problem in the way business terms are being executed. Why do these happen?
Well, the issue could be arising from a lack of preparation and foresight; no one is to be blamed either, the rapidly evolving business landscape throws a curve ball. With several thousands of digital companies forming a complex maze of partnerships, challenges are certain. These challenges could arise from all quarters, not from your partners alone, but your customers or external sources as well.
Let’s look at some of the typical challenges you may confront in your engagements with new types of partners:
There is a content provider and a partner who deals with a variety of content types including OTT video and mobile apps, but you find it difficult to integrate all types of services on one platform.
The content offered by your partner is incomplete or corrupt, and the charges need to be reversed to a customer. How will you settle the deal in this context?
A customer engages in fraudulent activities; for example, after downloading the content, he/she defaults the payment arguing that the content is of poor quality.
Partner settlement becomes difficult as your partner engages in unethical practices like using a fraudulent platform for tracking the number of downloads or the impressions.
A phishing fraud affects your customers, forcing you to compensate massively.
An inadvertent regulatory violation from your end leads to a serious legal complications, leading to financial loss and damage to reputation.
And the list goes on…
Where does the problem lie? Who is to be held responsible? How to overcome these challenges?
The underlying problem with most Telcos pursuing digital opportunities is sometimes the lack of preparation both in terms of technology, infrastructure and awareness. With constant changes to the digital landscape, regulatory pressure and escalating CAPEX, anticipating everything that could go wrong is a downward spiral. An upgrade to your Business and Operations Support System (BSS/OSS) could be a solution, but how far and to what extent the upgrade should go? Most Telcos have already initiated the BSS/OSS transformation, but has not yet achieved the level of digital maturity which they are supposed to. Why so?
Well, the scenarios discussed above indicate that the technology infrastructure you are building to protect your digital business should be capable of addressing not only the current challenges but also the future events that are likely arise. In other words, it should be capable of predicting the future scenarios to an extent and address the problematic ones before they impact the system. And be future compatible so that it can adapt quickly.
Broadly speaking, an encompassing OSS/BSS strategy that addresses different aspects like revenue management, billing & partner management and customer experience in a proactive manner is the need of the hour.
Stay tuned to understand how Subex can help you build a digital billing strategy that helps you rise to the status of a successful Level 4 digital service provider (DSP). If you want to know how Subex’s solutions can help you build a digital ecosystem that boosts your revenue streams and enhances customer value, contact us.
Debolina is a seasoned professional who specializes in Telecom Partner Settlement, Route Optimization, Interconnect Billing and Order Management/Provisioning. She has over 10 years of experience in the Telecom industry and has a vast exposure to customers from all regions. Debolina currently works as a Technical Product Manager where she manages the product management for the Cost Analytics Portfolio of Subex. She is an active contributor on various forums like Actuate, QlikTech, and is also a voracious reader and an active blogger.
