Ovum: Telcos Are Investing Big in Revenue Management Systems

In the past two decades, telephone companies have transformed themselves into communications service providers that deliver not just phone services, but also applications, data transport, infrastructure, video, and wireless services. Now these companies are going through yet another transformation – and this one is an even bigger challenge.

While the evolution from telco to CSP (News - Alert) involved transitioning from selling a more limited set of services to deliver a wider array of mostly connectivity options, current conditions such as competition, customer demands, and market consolidation are forcing telcos to completely rethink how they do business and adopt new systems to help them be more agile, cost efficient, and open.

“The telecoms industry now has to move at Internet speed,” notes Chantel Cary, Ouvm analyst and the author of the report. “Customers are always online or interacting with a connected device, and this is changing their expectations of their telco service providers.”

One challenge telcos face in meeting these new expectations is the inflexibility of their existing support systems. As a result, according to Ovum (News - Alert), one of the telcos’ key IT priorities is improving their revenue management systems. Indeed, Ovum says that about 15 percent of telcos’ overall IT budgets over the next 18 months to be allocated toward revenue management systems.

Part of the problem is the excessive number of systems in use. A whopping 60 percent of telcos have 50 or more revenue management systems, according to Ovum. So, clearly, consolidation of these systems is an imperative. Ovum suggests that’s exactly what many telcos plan to do in the year ahead. Adding convergence and real-time charging functionality and restructuring roaming tariffs are also on the menu for these telcos over the next year, Ovum says in its “Telecoms Billing Market Landscape: Challenges and Priorities” report.