Thursday, January 14, 2010

OSS BSS Cost of Ownership

For Telecom Operators OSS and BSS acquisition and maintenance takes up lion's share of IT Spend. Just how much does it cost the tel co to acquire and maintain OSS & BSS? A perspective.

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Indian newspapers and telecoms sites have been carrying articles about BSNL Phase six tender.
Part 4 of phase 6 tender is focused on procurement of Operations support systems and business support systems.
According to press reports, lowest bid for OSS/BSS is approximately INR 3600 crores to support around 249 million subscribers.
How 249 million subs? 93 million subs for ph6.1 ; 93 million for 6.2 and 60 million existing subs totals to 249 million subs.
Assuming existing infrastructure of INR 200 crores of hardware will be reused;this translates to additional 16 cents per sub.

This translates to approximately INR 149 per sub or USD 3 per sub for entire OSS/BSS stack. Scope includes software licenses, hardware, deployment, implementation and support for period of 7 years after implementation. USD 3 per sub is possibly a benchmark ; actually figures will be lower than that. Assuming existing hardware infrastructure of approximately INR 200 crores will be reused.
India/BSNL can certainly be sourcing hub for telco's in emerging markets like Africa.

Open private discussion on following:
How does USD 3 rate compare with private operators in India? Are they also doing similar investments in OSS/BSS?
Is it possible to cut investment costs in OSS/BSS given declining ARPU's.
Are technology options available that can help cut the cost further.

Can Google's infrastructure design and operations based on warehouse scale computing offer way to bring down this cost?

What models can be deployed to achieve similar level of IT support with lower capital intensity.
Is capital intensity consistent across other operators in other countries.