Profiting from flow-through provisioning
The availability of technology to provide a platform for new services will change the way service providers compete for their customers, moving the battle away from simple price wars. Service providers will instead be leveraging technology to create a platform for differentiation that offers their customers a new level of flexibility and control of their communication services.
But no matter how sexy the new services are, or how advanced the technology that enables them, if a service provider can't rapidly provision the new services, they endanger their business case by pushing out the revenue that initially justified the new technology deployments.
Management of telecommunications networks is steadily increasing in complexity and cost. In order to keep pace, operations support systems must be able to either accommodate these new services, equipment and trading relationships, or face even more manual processes, errors and costs.
This doesn't have to be the case. Using standard computing technology, it is possible to eliminate the need for service providers to manually provision network equipment or manually request services from an associated service provider. It is a win-win scenario for both service providers and customers.Voice-over-broadband
One of the most compelling arguments behind voice-over-broadband is that it brings together the ability to deliver new services and the ability to simplify provisioning of existing services.
Voice-over-broadband utilizes a high-speed broadband connection to deliver multiple channels of toll-quality, packetized voice over a single broadband pipe. This dramatically improves the revenue potential of the single connection, and ultimately eliminates the need for the manual connections traditionally required to turn up voice services.
By packetizing voice in the local telephone network, and creating multiple "derived" lines within each broadband connection, service providers no longer need to send out technicians to turn up new services, but instead turn up new voice lines virtually over the customer's broadband connection in real time, without a visit to the home or the local switching center.How flow-through provisioning works
The overall objective of a flow-through provisioning architecture is to automate the provisioning of new services, eliminating costly, time-consuming and error prone manual processes while enabling service providers to benefit from the revenues generated by customer access to on-demand services.
Traditional voice service is controlled by a Class 5 switch and delivered to the home via pairs of copper wires. The systems that were designed to support provisioning of traditional voice services were built around the premise of centralized provisioning of simple voice circuits. The recent explosion of competitive local exchange carriers who resell incumbent LEC unbundled network elements, DSL service availability and the entry of cable operators into the telephony market has revealed the weaknesses in this model. Older OSSs were simply not designed to handle convergence of data or voice or the prospect of a single customer receiving portions of their service from multiple providers.
Provisioning for POTS is a relatively straightforward affair, with a focus on the Class 5 switch, because it consolidates service-providing facilities, the provisioning of those facilities, and control of those facilities. In addition, a customer is assumed to be serviced by a single service provider. In this model, the Class 5 switch is the center of the service providing universe, within the context of an SS7 (signaling system 7) network.
The deregulated telecommunications market is far removed from the traditional single-source provider that owned all the facilities and equipment necessary to service the needs of a customer. Now there may be several independent operating entities that are providing services to the customer and therefore are involved from both a facilities and equipment standpoint. The service provider who deals with the end customer is the primary provider, with potentially one or more secondary service providers that supply some or all of the facilities, services and equipment used for servicing the end customer. The current methodology for managing this multi-provider process is typically manually intensive, and as a result, fraught with errors, delays and hidden costs.
Ideally, the primary service provider is responsible for coordinating all requests, which flow to the secondary service providers. The secondary service provider then enables the requested service within that network. Technical issues surrounding creation of service within a specific secondary service provider's network are masked from the primary service provider, and in turn, the end customer.
What prevents this from occurring today is the inability to coordinate the corroborating details among interrelated services. The unfortunate situation is that by relying on manual interfaces between service providers, errors are bound to occur. This has an impact on the revenues of all service providers involved. It also precludes customer self-provisioning, which by its very nature, requires automated interfaces.
The model depicted in Figure 2, as it applies to voice-over-broadband, is the basis for self-provisioning and on-demand services.
The direct benefits of flow-through provisioning are realized from the following changes to the conventional model:
- Reduction, if not elimination, of truck rolls in the provisioning of customer premise equipment
- Dramatic reduction in the number of customer service representatives required
- Elimination of the time between service requests and the delivery of service
- Virtual elimination of technical intervention in the service provisioning process
- Elimination of perceived complexity in ordering services
- Elimination of errors due to manual processes
- Lowered barrier to impulse buying of services.
These benefits all hit the bottom line of the service provider, enabling service providers of all types to rapidly deploy and recognize revenue from new services. Flow-through provisioning enables service providers to work within each other's network framework, vastly simplifying deployment.Benefits: Services 'on-demand'
According to information provided by Telcordia Technologies, about 15 percent of all U.S. households account for the highest service bills and the highest incidence of subscription to voice, video and data services from various providers. It is not uncommon for these households, using that typical set of services, to have monthly bills from multiple providers totaling more than $300. That means there are at least 15 million ideal targets for competitive bundled services. In addition to bundled services, this 15 percent of households are willing to pay for the added convenience of additional phone lines, and the flexibility of being able to provision voice and data services and features on-demand.
Automated provisioning enabled by voice-over-broadband allows service providers to add this new level of convenience to their customers' experience. Today, end users in densely populated metropolitan areas are often on a waiting list to get second and third phone lines. The ordeal of getting a new voice line after a move can often take weeks and a visit from a technician. Imagine having the ability to immediately satiate the demand for new lines, and to simplify the process of making moves and changes. The cost savings alone make the case a compelling one for service providers.
The typical first cost for a three-mile loop of copper is approximately $600, according to Telcordia. In addition, service provisioning activities such as disconnects and reconnects generate significant service order volume for a local exchange carrier. Typically, each year the sum of service order-related disconnects and reconnects is 65 lines per every 100 lines in service, even with an overall service growth rate of only three or four percent. However, by delivering derived voice services via broadband connections, service providers extend the life of their copper or coax infrastructure and eliminate the need for additional lines to be installed to fulfill demand for additional phone lines. It also eliminates the need for manual disconnects and re-connects. Clearly, the quantifiable benefits of flow-through provisioning become tremendous as the penetration of broadband services increases.
Cost savings aren't the only benefit. Self provisioning and provisioning "on-demand" translate convenience and flexibility into dollars for the service provider. If turning up a phone line for a week while family is visiting is as simple as the click of a mouse, customers may indeed pay a fee for that convenience. If phone lines could be turned off when a teenager was grounded (for example), and then easily turned back up, many end users would also be willing to pay for this added convenience.
Because the incremental cost of a derived line is minimal with voice-over-broadband, service providers can now provide second, third and fourth voice lines to end users at much lower costs, and still make money from the line itself and the associated features the end user purchases. In this model, the 15 million household target market would be able to take advantage of a phone line for each individual in the household, especially if the line itself cost as little as $5.
Automated provisioning also simplifies the adoption of new services. New services can be easily subscribed to with the click of the mouse, encouraging impulse buying of new features. For example, someone working out of their home might decide to take advantage of customized call routing services that enable the end user to determine where calls are routed depending on time of day, or by who the caller is, ensuring that business associates are routed directly to the home number, while the mother-in-law is routed to voice mail.
Service providers operating in a convergent environment cannot afford to waste time and money on manual processes that are ineffective and inefficient. The necessary technologies and methodologies exist to bridge the communications gap between providers and simplify the provisioning process, creating direct cost savings and new revenue opportunities. Service providers without the ability to support flow-through provisioning will find themselves unable to form partnerships with complimentary service providers in the increasingly deregulated environment. They will also find it difficult to compete in a market where customized, on-demand communications services become the real means for differentiation.