Acrossthe Spectrum 

Posted 05/01/2001

Across the Spectrum 
Carrier Support Services a Growing Field 

By Chris Garifo

Carriers are expanding their capabilities and offerings rapidly, as they look to become the single-source provider of all their customers' telecommunications needs. That means they'll be providing wireline and wireless; voice and data; dial-up and broadband; and a host of enhanced services, some of which have yet to be developed.

The array of ever-increasing offerings is fueling more products, which are needed to meet the growing demand for more carrier support services. Those services run the gamut from tools to help carriers understand their customers' needs and how customers are using their services, to billing, to Internet security, to inventory and catalog management.

Carrier executives are scanning the marketplace looking for that next "killer app"; hoping it will drive increased revenue by helping to reduce costs through greater levels of efficiency; or by improving levels of customer care, thus reducing customer churn.

At the same time, they'll have to find the right products to support those applications, and decide on whether that support service is operated and maintained in-house or is outsourced.

While at first blush many of these products simply might appear to be another OSS or business support system (BSS) application, in reality these products are carving out a new niche.

For example, Internet-access-control solutions developer Bridgewater Systems Corp. (www.bridgewatersystems.com) recently rolled out its NetProfile Carrier Edition, which will give wireless carriers the ability to add premium data and content services to their networks. Such a product doesn't belong entirely in either the BSS or OSS space, because of the way it spans different aspects of a carrier's business and operations.

"If you look at us in the normal operations support systems definitions, we don't really fit very neatly into the normal categories of things," says Russ Freen, Bridgewater Systems' vice president of research and development. "We look a little bit like an operations business system, but since we're also an active part of the data flow through the system, we also look a little bit like a network element, if you like, as well."

Trying to define carrier support services as its own space can be tricky, because, as Qwest Communications International Inc. (www.qwest.com) senior vice president of customer care Mark Pitchford says, "It is a pretty broad area." Qwest provides carrier support to itself, and to other carriers with which it has a wholesale relationship. Those services include billing and collection agreements with other carriers, through to provisioning network issues and network support.

Pitchford suggests Qwest's residential customers are getting more and more complex services, "especially as you're getting into broadband access, those kinds of things, which do take a higher level of expertise and knowledge, from a customer-care standpoint, to be able to respond to those issues," he notes.

For Qwest's larger business customers and some of its wholesale customers, some of the services obviously are becoming more technologically complex, such as in hosting IP VPNs and other such services.

However, Pitchford says, Qwest is doing much more applications support for businesses, which means it needs to understand the complexities of the business that those companies are in more than it had to in the past.

"If you were just a network provider, in most cases, then, the business was more involved in identifying what services they need and how they integrated those," Pitchford says. "As we've become more of an applications provider, now we're much more involved in helping [businesses] to determine what they need and how to integrate it into their networks."

The broadening of carriers' capabilities and the services and products they can offer provides those carriers both "an opportunity and a challenge," says Jim Ishikawa, vice president of marketing for Extent Technologies Inc. (www.extent.com), a billing and customer-care solutions provider.

Decisions, Decisions

With the convergence of the telecom and Internet worlds, the value chain for carriers is extending from the end user holding a handset to the ASP on the other side of the Internet, Ishikawa explains. Throw wireless capabilities into the mix, and the problems facing carriers in providing the services that their customers demand, at the level those customers expect, increase exponentially.

As a result, Ishikawa suggests, "There's no way any single operator can provide all the services that are required."

That means carriers are going to have to look for partners to provide those services, and to support those services. And make no mistake about it--carriers won't have a whole lot of choice about whether they'll offer enhanced services, says Cindy Adams, senior director for unified communications market development for iBasis Inc. (www.ibasis.net), an Internet telephony services provider.

Carrier support services include marketing, billing, provisioning, and customer support or customer care, Adams says. Any support service a carrier might select from the spectrum of market offerings will have to satisfy the needs and requirements of each of those respective areas.

In addition, the carrier will have to decide whether to keep the support service in-house or to outsource it to another provider. One of the key drivers in making a decision on whether to outsource the service is how it will affect the carrier's ability to "own" its customers.

From the billing perspective, a carrier will want to be able to present its customers with a single bill, Adams says. On the provisioning level, the service provider must be able to take the [incumbent's] interface and integrate it [with their own] interface.

For example, if a carrier has a web portal that customers can come to and sign up for services, the enhanced services have to be able to fit "very nicely" so that it looks consistent and is not disjointed, Adams says.

From the customer-care or customer-support perspective, the carrier may provide first-level customer support, so that it's face-front to the customer--either through an in-house or outsourced call center--and the support services provider then offers second-, third- or fourth-level customer care through its agents, Adams says.

"I think it's becoming less of a fine line and carriers are much more flexible [about outsourcing] because of the business environment today," Adams says.

However, deciding whether to outsource carrier services, and which of them to outsource, is a tremendously difficult decision.

On one hand, carriers have an advantage in that they provide access to the end user and are in position to broker the enhanced services that are seen as being a prime source of revenue in the new, converged world. On the other hand, carriers will be faced with keeping track of and supporting everything that's flowing through their networks, which will require the use of more resources. For that reason, many carriers have grown far more flexible when it comes to outsourcing.

A carrier's business model is a driving factor in the decision-making process, Adams says. However, current market conditions seriously are testing the carriers and causing them "to think more carefully about what they need to continue to do moving forward and what they're more willing to change."

Carriers also will look at their personnel and expertise in deciding which direction to take, she says. In many cases, a carrier will use an outsourced offering as a temporary alternative to bring a service or product to market quickly, while it develops the knowledge and expertise to bring the management of that service in-house at a later time, she says.

Other factors to be considered are the costs, the time to implement and the advantages as they relate to the market.

"I think there's a risk factor in terms of their level of confidence in either how well they can do something or how quickly an enhanced service will take off," Adams says.

Core competencies and cost certainly are among factors to be considered when selecting a carrier support service and whether to outsource it, says Qwest's Pitchford. But another factor is the carrier's relationship with its union.

For example, Pitchford explains that Qwest considered a pair of options related to the relocation of a customer service center. One option was to build a new center with union representatives and employees. Qwest did that, because the union-represented base was more cost effective than outsourcing.

"Because of the good relationship we have with the [Communications Workers of America, www.cwa-union.org], they created a very cost-effective title to support that kind of job function, knowing it was very competitive in the marketplace," Pitchford says.

Qwest also would be more likely to keep in-house the more complex, higher-end systems while allowing simpler systems to be outsourced, Pitchford says.

"We've found that it's better to take the knowledge of our employee base and focus it at the high end and have that as our competitive differentiation," Pitchford says. "Then, where it may just be a simple question, say, for example, if you had a long-distance billing inquiry on 'Did I make this call?' those are the kinds of things I think we can outsource more cost-effectively."

Size: A Short-Term Advantage

Smaller and newer carriers may have an advantage over the larger incumbent carriers because, for the most part, they don't have to deal with the legacy technology the incumbents have, Adams says.

As a result, newer carriers likely will be able to respond faster in bringing new products and services to market and supporting them.

However, that advantage can be fleeting, Adams says. Eventually, the slower-to-react incumbents will make similar moves and, because of the major incumbent carriers' incredible customer bases and capital resources, their inertia will easily sweep away competitive carriers that have not taken the time and effort to strengthen their position in the market.

"The [competitive carriers] that are lucky enough to have done well enough to face up to the leaders will figure out how to continue to be very successful, or they'll be acquired," Adams suggests.

One reason for such an acquisition is that it could reduce greatly the time it takes to implement the support services a major ILEC decides it needs. The ILEC acquires a smaller CLEC that has invested in state-of-the-art support services for its enhanced services, then simply integrates those support services into its own systems.

Regardless of which support services a carrier might select, how it acquires them or whether it chooses to keep it in-house or outsource it, the bottom line has to be how the end user--the residential consumer or business customer--ultimately will be affected.

"With the level of competition out there today, customers are clearly making decisions based on not only do we have the right product and technology for them, but also how they are looked after;-- what the customer care that they received [is]," Pitchford says.

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