XoIP – Are You Ready for It?

Downturn is nerving, market is maturing, ARPU is on a decline, competition is hyper, and convergence is in air! Cable and DBS operators overhaul to FTTH and MPLS networks to have Digital TV in place, Wholesale VoIP players in business as operators want to plug their voice services needs, ISPs take WiMax and VoIP licences, Wireless players go for 3G and beyond, Wireline players have IP infrastructure for IPTV and VoIP, licences being issued for VoIP, IPTV, Mobile TV! IP has changed the game and many growth markets are maturing rapidly. The lines between industries are blurring and everyone is after the same consumer.

IP is no longer a luxury of the top tiers; it is now a need for any operator and is gradually attaining the indispensable status in the communications industry. Today IP networks are inevitable due to major technology advancements, evolution of cost-effective network solutions, convergent market place and increasing competitive pressures. Industry has matured to the extent that it is no longer important to know what is the service offered over the IP, because having  an IP network in place is testimonial that an operator is enroute his journey to become a one-stop-shop for all communication services. It is now the age of XoIP – “Anything over IP”.

The Road to XoIP –challenges galore

Having said this, going the XoIP way is not an easy game. It brings with it a host of challenges. Network and QoS challenges aside, there are other unwieldy elements that hinder the operator from reaping revenue from IP services. The most prominent is the operator’s existing legacy stove-piped infrastructure. Operators most deploy OSS/BSS system to cater for a service but over time they keep deploying a multitude of systems to enable them roll-out new services in the market. In the process they fail to forecast the scalability of their systems to support future services. While deploying the OSS/BSS systems they look into the cost and capabilities blinded by the current need thus do not plan for the future.

An IP network brings in swarms of packet data, which unlike traditional CDRs need to be correlated and consolidated to be deciphered into an event, which then need to be priced as per its content and eventually billed and settled appropriately. But most of the systems in place are originally made for a service and rarely to cater to any transaction!

To truly leverage their possession of multiple services, a triple/quadruple-play operator need to be able to effectively package products as per the different levels of its usage and create cross-product bundles for each targeted customer segment and attach attractive price tags appropriately. Current systems seldom have the ability to make this possible, mainly because their framework is built for a specific product/service. To desire flexibility from such systems will almost be like trying to put a circular peg in a square hole.

In the converging marketplace, the chances to delineate between customers have grown very thin, almost narrowed to one set of customers for whom all operators prey for. Therefore the bait to the customer is the operator’s services differentiator. This challenges the operator to couple their customer hierarchy with their product and services bundles hierarchy. Alas! Existent infrastructure may highly impede this.

Increasing competition has also made operators realise the need to proactively acknowledge the loyalty of their high value customers. This requires a 360° view of the customer to enable segmentation based on their tenure with the provider, the profitability generated in terms of revenue vs. cost and also based on other factors like privileged customer/account status, etc. Highly disjoint databases restricts the operator to have an integrated view of their customers.

Adding to his woes is the challenge of implementing IP in the client environment as he faces the resistance to change the existing infrastructure coupled with the integration and interoperability challenges in the deployment stages.

While rolling out IP services, it is very important for operators to maintain the balance between service mix, price, and customer experience. It is easy to bring-in flexibility in service mix; thanks to the revolutionary changes in IP technology. However, the market conditions play a critical role in fixing the mix, particularly in pricing. The way you price the service offering makes a large impact on how loyal your customers are, particularly in volatile economic conditions.

With IP in place operators in their yearning to tap revenue from new services mostly end up rolling out product and service bundles to match competitor price, seldom with deliberations on margins achieved. Highly flexible systems will allow operators to assess the product and service bundles, enabling them to be pre-tested before launch against multiple set of target segments.

This current economic scenario also demands systems that can be deployed in multiple models to include SaaS, hosted, bureau and managed services.

It goes without saying that to go IP and have multiple services atop it requires high scalability, flexibility and configurability. In addition, the ability to meet challenges in driving the market demands.  In this race for market share, the communications industry requires systems that can stand up for this challenge!

So its time to ask that question again – Are you ready for XoIP?