Winning with convergence

Parvaiz Ahsan, managing director, LHS Middle East, Africa and Asia-Pacific Division, tells CommsMEA why operators are increasingly turning to services such as convergent billing platforms to drive efficiencies and stay ahead of the pack.

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Winning with convergence Parvaiz Ahsan says that operators increasingly see convergent billing as a means to drive efficiencies.
By  Roger Published  December 10, 2009

CommsMEA: Tell me about LHS. What does the company do in the MEA region exactly?

Firstly, let me explain a little more about LHS and products and services. LHS is an independent software vendor offering convergent, charging, billing and customer care products and services.

In the MEA region our footprint ranges from Morocco on the Atlantic coast, right across North Africa to Egypt. We also have a strong presence in the Middle East, with customers in seven countries, and sub-Saharan Africa.  The conditions in these markets and BSS strategies for operators in these markets vary greatly based on different rates of economic development, investment in network infrastructure, the various regulatory environments, and even differences in culture. 

CommsMEA: How is the market for LHS products and services in the MEA region?

Despite the global economic slowdown rapid growth is still present in much of the region and LHS has experienced a significant increase in demand for our products and services.  However in addition to high levels of subscriber growth, there are also a number of other significant factors that are driving investment in BSS.  For example, our customer base incorporates green field mobile operators in rapidly growing markets, integrated operators (mobile and wire line) in newly deregulated markets such as Tunisia and highly advanced markets such as the UAE.  So the increased demand for BSS systems is being driven by a wide range of economic circumstances and business needs.

In particular we are seeing a growing demand for convergent charging and billing solutions. In 2009 in the MEA region, LHS has sold 4 convergent charging and billing solutions. In addition operators are increasingly demanding that we deliver services directly to operators in conjunction with our global SI partners.

CommsMEA: Could you explain a little more about the specific challenges facing your customers?

In more mature, but nevertheless fast growing markets, such as North Africa we are seeing operators deploy convergent charging and billing for the same reasons but moreover to enable them to introduce more innovative types of services with features such as real-time cost control, which is key for operators that seek to drive post paid subscriptions.

In other countries such as Tunisia, deregulation is a major BSS investment driver. The potential of increased competition means that operators are examining the efficiency of their processes but also they must look at the customer experience in terms of the types of the services they can offer, and customer care.  We are seeing incumbent operators, in markets facing deregulation, deploying convergent charging, billing and customer care systems to offer greater simplicity of bundled integrated services and a single point of customer care. Likewise in advanced markets such as the UAE integrated service packages supported by a single bill, cross-service promotions and a single point of customer care are viewed as essential to create the customer stickiness needed to compete.

CommsMEA: What type of companies stand to gain most from these types of products and services?

LHS' BSCS iX is a fully convergent charging, billing and customer care system. Across the world we support nearly all types of communications operations, including GSM, wire line, ISP, and cable TV, both prepaid and postpaid. In the MEA region we are supporting a large number of mobile operators in fast growing markets but, as mentioned earlier, increasingly we are supporting operators offering bundled packages comprising fixed, mobile and sometimes internet services. From a BSS perspective these companies are looking for the ability to support all these services with one bill and with a central point for customer care.

They are also looking for more sophistication in terms of their marketing offers and the ability to provide a more personalised customer experience, with cross-service promotions and loyalty programs. This has certainly been a key factor in such operators deploying our software.  We have also found that operators in fast growing or dynamic markets, where time-to-market is imperative are seeking open systems that can be easily integrated into an evolving IT architecture.  Several of our customers operating best-in-class IT strategies have selected BSCS iX precisely for this reason.

CommsMEA: Do you think operators are failing to look at convergence and the need to adopt these types of services? If so, how could this affect their ability to compete?

These markets and BSS strategies for operators in these markets vary greatly based on different rates of economic development, investment in network infrastructure, the various regulatory environments and the like. Likewise, the potential role of convergence in BSS strategies differs significantly.

A convergence strategy should be determined by a wide range of business objectives including achieving greater efficiency, service, innovation and reduction of credit risk and increasing customer focus.

I believe that most operators are aware and understand what convergent charging and billing offers. Take a look at green field operators. Very often they choose to implement convergent charging and billing solutions from the outset because of the immediate competitive advantages they bring, in terms of service innovation and efficiency.

The challenge for incumbent operators is how to make convergence happen. An incumbent operator may have multiple existing systems in place with various levels of customisation or integration with other systems. For such operators a convergent charging and billing environment may require a significant, lengthy and potentially complex transformation project.

Based on our experience of such incumbent operators, the challenge is to clearly define a target convergent architecture. They must then break down the transformation to this architecture into manageable steps, with each step serving a specific and immediate business need. Upon completion of each step, a re-appraisal of the target architecture must be performed to ensure it still supports the overarching business strategy.

CommsMEA: What trends do you see coming in LHS' market in the next couple of years?

Growth rates will inevitably begin to decline and competition will increase. I believe that preparing for lower growth is essential for operators to remain competitive in many of these emerging markets in the region and I expect operators to take steps to reduce opex and capex to establish leaner operations. In addition, throughout the region, some of the large communications groups such as Etisalat, Orascom, Vodafone and Orange have invested extensively in acquisitions. 

I therefore expect to see a trend towards centralised IT management in order to leverage synergies created by this M&A activity and to prepare for the slowdown of growth. From a billing and customer care perspective this could result in operators setting up billing hubs, with several operators billing operations being consolidated on a single platform.

I also believe that more and more operators will embark on projects to converge their charging, billing and customer care operations. As growth declines, competition will increase and the need for efficiency and innovation will also increase.  It is clear that in some markets incumbent operators are feeling intense competition from new highly capitalised green field operators. These are owned by large aggressive groups that are entering the market with state-of-the art network infrastructure and IT systems including convergent charging and billing systems. Such incumbent operators will therefore be forced to invest in order to keep pace.

Parvaiz Ahsan is managing director of LHS Middle East, Africa and Asia.

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