Telco Triple-Play Service Fulfillment

Transcription

1 White Paper Telco Triple-Play Service Fulfillment Prepared by Alan Breznick Senior Analyst, Heavy Reading On behalf of December 2010

2 TABLE OF CONTENTS I. INTRODUCTION: TURNING THE TELCO TRIPLE PLAY... 3 II. THE STATE OF FTTH NETWORK BUILDS... 5 III. THE COMPETITIVE FRONT FOR TRIPLE-PLAY BUNDLES... 7 IV. BENEFITS OF DELIVERING TRIPLE PLAY OVER FTTH... 9 V. CHALLENGES OF DELIVERING TRIPLE PLAY OVER FTTH VI. BEST PRACTICES FOR DELIVERING TRIPLE PLAY OVER FTTH VII. IMPORTANCE OF OSS STANDARDS VIII. CONCLUSION LIST OF FIGURES Figure 1 US MSO Broadband Gains vs. Telco Losses Q Figure 2 FTTH Growth North America... 5 Figure 3 Virgin Media's Triple-Play Growth... 7 HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 2

3 I. Introduction: Turning the Telco Triple Play For telco service providers, the days of one-size-fits-all service offerings and guaranteed revenues are gone. Instead, these days the spoils go to the swiftest to market, the innovators, and the customer-focused providers. With cable operators, mobile providers, and new players, such as Google Voice and Skype, teaming up to lure away phone customers with VoIP, wireless broadband, and over-the-top (OTT) technology, incumbent and competitive phone companies are watching their bread-and-butter voice subscribers and revenues dwindle away every quarter. In 2009, for instance, US telcos collectively lost 9.6 million residential lines, or roughly 7.3 million landline voice customers, because of cable and wireless competition, according to the latest market figures compiled by SNL Kagan. As a result, US telcos' once dominant share of the residential phone market continued to slip, falling to just 54.4 percent of the 115 million US phone households by the end of last year. Unsurprisingly then, 2009 ended up ranking as the worst year for telcos in a decade, according to Ovum. In a recent report, Ovum found that telecom service provider revenues grew just 2.2 percent worldwide last year, due to the global economic slump and the continued declines in fixedline voice services. At the same time, cable operators continue to capture more broadband subscribers, usually at the phone companies' expense. In Europe, for example, the top 10 cable operators added about 300,000 data subscribers in the second quarter of 2010, boosting their collective total to 14.9 million, according to figures compiled by Cable Europe Labs. The eight largest European phone companies added about 450,000 data customers in the spring, boosting their collective total to 57.8 million. But the cable market share continues to increase steadily. The competitive figures are much less favorable in North America, where cable has always held the broadband edge. In the second quarter of 2010, the leading US cable operators added more than 340,000 high-speed data subscribers, up 40 percent from the year-ago period, according to figures compiled by Leichtman Research Group. In contrast, the leading US phone companies actually lost about 7,500 data customers as they sought to convert their DSL users over to fiberbased offerings at the same time that cable operators introduced ever-faster wideband service. Figure 1: US MSO Broadband Gains vs. Telco Losses Q2 Q2 TOTAL SUBSCRIBERS Q2 SUBSCRIBER GAINS Total Top MSOs 40.5 million +343,688 Total Top Telcos 33.0 million -7,473 Total Broadband 73.5 million +336,216 Source: Leichtman Research Group The only recent bright spot for traditional phone companies has emerged on the video front, as the telcos have increasingly rolled out IPTV services to retain existing customers and win back some of those that already left. In France, for instance, several IPTV providers have signed up more than 9 million video subscribers among them over the past few years, according to the Broadband Forum. In fact, both France Telecom's Orange TV and Iliad's Freebox TV, the nation's two leading IPTV operations, have signed up well over 3 million IPTV subscribers apiece. Similarly, in the US, Verizon and AT&T teamed up to net nearly 2 million telco TV subscribers last year, up from almost 1.8 million in 2008, with their fiber-based digital services. That compares quite favorably with the loss of nearly 1.3 million basic cable customers by US MSOs. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 3

4 Even in the face of their basic-video market share losses to the telcos, however, cable operators are countering by continuing to upgrade their analog cable subscribers to digital service, enlist new digital video customers, and upgrade their plant. In the US, for example, MSOs still added or upgraded more than 2.2 million homes to digital video service in Plus, American satellite TV providers still added almost 1.4 million digital video subscribers of their own. Moreover, cable and satellite operators still dominate the pay TV market in most regions of the world. In a US consumer survey conducted by Heavy Reading last fall, for instance, nearly 62 percent of respondents identified cable operators as their current pay TV providers, while another 27 percent identified satellite TV providers. In contrast, just 7 percent of respondents named telco TV providers. Clearly, telco service providers must start taking bigger, bolder steps to compete with cable, wireless, satellite, OTT, and other rivals. To remain relevant in the ever-more competitive telecom and media markets, they must go beyond their current lineup of "me-too" legacy tech products and start differentiating their service offerings. Telcos must also put more effort into reducing the drain of subscriber disconnects and attracting new customers in larger numbers, as well as increasing the "stickiness" of these subscribers once they have been either won or won back. What is more, telcos must further boost their capacity for new, bandwidth-hogging digital services such as video on demand (VoD), HDTV, and DVRs; find ways to go to market with multiple services rapidly and efficiently; and improve the entire user experience for customers. In practice, this means that service providers should seriously consider deploying powerful fiberto-the-node (FTTN) and preferably fiber-to-the-home (FTTH) networks with nearly unlimited capacity to match and exceed the bandwidth prowess of cable, wireless, and satellite operators. Then they can use these new, fiber-rich networks to create, package, and deliver compelling bundles of voice, video, and data services that compare favorably with the similar triple-play packages that cable operators have been deploying to great effect. Only then will telcos be able to regain their competitive footing, stem the steady loss of voice subscribers, re-galvanize their broadband data efforts, attract substantial numbers of video customers, and introduce innovative services, applications, and business offerings that further engender subscriber loyalty. This white paper spells out how telco service providers can deliver competitive triple-play service bundles to consumers, with or without new all-fiber builds. In particular, the paper explores the major technical, operational, and financial challenges of IP service fulfillment for triple-play packages. It also suggests the operations support system (OSS) best practices that service providers can adopt to tackle the major back-office and provisioning challenges for triple-play fulfillment. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 4

5 II. The State of FTTH Network Builds While few telco service providers around the world offered any kind of service over fiber networks four or five years ago, FTTH network build-outs are becoming increasingly common today. In countries and territories as wide-ranging as Japan, the US, Sweden, Hong Kong, North Korea, Norway, Taiwan, and Slovenia, telcos, cable operators, broadband Internet service providers (ISPs), and other network operators are all building fiber lines to meet the exploding bandwidth demands of residential and business subscribers. As a result, Heavy Reading estimates that there are now approximately 62 million FTTH subscribers around the world, including 46 million in the Asia/Pacific region and more than 9 million in the Americas. In the US alone, Verizon and AT&T now have more than 6 million fiber-connected video and/or broadband subscribers between them, up from more than 4 million a year ago. Figure 2: FTTH Growth North America SEPT SEPT SEPT SEPT FTTH Homes Passed 9.6 million 13.8 million 17.2 million 20.0 million FTTH Homes Marketed 8.0 million 12.4 million 16.0 million 18.2 million FTTH Homes Connected 2.1 million 3.8 million 5.3 million 6.5 million Source: FTTH Council Moreover, FTTH networks now pass more than 110 million households around the world, up from about 95 million a year ago. That total includes more than 70 million homes in Asia, more than 20 million households in North America, and more than 18 million in Europe. So, even while the technology is still in its relative infancy, FTTH architecture builds have already become a worldwide phenomenon. At Heavy Reading, we expect this annual double-digit growth rate to continue. In our latest forecast, we project that the number of homes passed by FTTH connections globally will easily scale 200 million by We also project that the number of homes actually served by FTTH lines globally will climb to about 129 million by So far, incumbent phone carriers account for the great bulk of the FTTH network build-outs throughout the world. The FTTH leaders across the globe include many incumbent telcos, such as NTT in Japan, KT in South Korea, Verizon in the US, France Telecom in France, Telecom Italia in Italy, Telefónica in Spain, China Telecom in China, and Chunghwa Telecom in Taiwan. We expect that incumbent carriers will continue to account for the bulk of FTTH expansion. Despite the high capex required, phone companies are pursuing a fiber-driven strategy to increase their overall bandwidth capacity and deliver more advanced digital services to consumers. The telcos are also investing more heavily in fiber because cable operators are showing greater interest in fiber builds, as well. In particular, service providers are pursuing this strategy to offer IPTV service and compete with cable operators on the multi-channel video front for the first time. Phone companies are also using new all-fiber networks to introduce triple-play bundles of IP-enabled voice, data, and video services, which keep legacy voice customers from defecting while also attracting new video and broadband subscribers. Consider the case of Bell Aliant. In early 2009, the Canadian carrier began building a FTTH network in Fredericton, New Brunswick, so that it could offer IPTV and triple-play services over bandwidth-rich all-fiber lines to city residents. Since then, the telco has signed up at least 37,000 IPTV subscribers in Fredericton. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 5

6 "It's a very cost-effective thing for us to build and it gives us the opportunity for revenue growth," Bell Aliant President and CEO, Karen Sheriff, told reporters. "It lets us pretty significantly expand our television footprint, to offer television to way more people than we do today." Pleased with its success, Bell Aliant is now expanding its fiber footprint to two more New Brunswick cities, Saint John and Moncton. The company's $445 million capital program also calls for extending the FTTH network to Nova Scotia and other parts of Eastern Canada over the next two years, giving the company a fiber footprint of more than 600,000 households and businesses passed by the end of As phone companies launch and expand their FTTH networks, they are relying on a wide range of technologies to deliver the video and broadband signals over fiber lines. That range covers both active and passive technologies, including GPON, EPON, BPON, point-to-point (P2P) fiber, and active Ethernet. What is notable here is that triple-play services can be delivered and provisioned commonly and efficiently across all applicable technologies, just as long as network operators employ a service-oriented architecture (SOA) and a service-centric approach. Instead of relying exclusively on FTTH or FTTx architectures, some next-generation operators are deploying a mix of advanced technologies to deliver triple-play services, particularly as they acquire other providers and expand into new markets. That mix of technologies includes Docsis and several wireless broadband systems, such as WiFi and WiMax. As a result, the emphasis is shifting away from the specific access network technology used in each case and toward a more allencompassing SOA that delivers a set of bundled offerings. Examples of such next-gen operators are beginning to abound throughout the world. They include telcos that own cable operations, such as TDC Denmark and YouSee; cable operators that are deploying fiber-to-the-business (FTTB) services, such as Buckeye Cablevision in the US; and MSOs that are building FTTH networks, such as ZON Multimedia in Portugal. Consider the approach of ZON Multimedia, which is now relying on a combination of Docsis 3.0 and FTTH networks to offer wideband high-speed and digital services to nearly 3.2 million households in Portugal. A recent spinoff of Portugal Telecom, the nation's incumbent telco, ZON has already signed up almost 400,000 subscribers to its triple-play packages of TV, broadband, and voice. That gives it a penetration rate of 33 percent of homes marketed for the bundles. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 6

7 III. The Competitive Front for Triple-Play Bundles Typically, telco triple-play bundles consist of voice, video, and Internet services at a discounted rate. Similar to the cable triple-play packages, the telco bundles usually feature scores of digital channels, broadband data speeds, and IP-delivered phone service. In many cases, they also feature deeper price discounts than the corresponding cable packages, with basic IPTV service sometimes even thrown in for free. Of course, the well-established phone companies are not alone in rolling out or preparing to roll out triple-play service bundles these days. In many sections of North America, Europe, and Asia, cable operators have been on the triple-play bandwagon for a while, either delivering triple-play bundles or racing to upgrade their networks so that they can offer discounted packages of voice, video, and data services. So, whether telco service providers are ready or not, the triple-play era is already well underway in the telecom world. In the US, for instance, Time Warner Cable reported that it had signed up nearly 3.7 million tripleplay subscribers by the end of June 2010, up 68,000 subscribers over a three-month period. North America's second largest MSO reported that another 4.9 million subscribers took two services. Therefore, about two-thirds of its video customer base is now subscribing to multiple services from the cable provider. Similarly, across the European continent, Liberty Global's UPC Broadband division reported that its bundling ratio reached 1.63 at the end of June, meaning that the average subscriber takes 1.63 services. Liberty said more than 40 percent of its subscribers now take at least two services and more than 20 percent now take three services. Even more impressively, in the UK, Virgin Media reported that approximately 3 million of its 4.8 million cable customers subscribed to three of its products by the end of September That gives the British MSO an astounding triple-play penetration rate of 62.4 percent, up from 58.9 percent a year earlier. In addition, Virgin Media, a major wireless provider, reported that its quadplay penetration rate already exceeded 11 percent. Figure 3: Virgin Media's Triple-Play Growth SEPT DEC MARCH 2010 JUNE 2010 SEPT Triple-play subscribers million million million million million Triple-play penetration 60.1% 61.1% 61.9% 62.4% 62.7% Source: Company reports In contrast to their generally more aggressive cable rivals, many incumbent phone companies around the world are just beginning to introduce triple-play service bundles. Like Bell Aliant in eastern Canada and Telefónica Brazil in South America, some of them are rolling out the video, voice, and data bundles over brand new all-fiber networks. However, in too many cases, the telcos are offering voice, data, and video bundles over bandwidth-limited DSL networks, rather than over faster fiber-rich or HFC networks. With DSL subscription rates declining, DSL transmission speeds maxing out on aging copper plants, and the demands of multiple TVs and bandwidth-rich digital video services overwhelming DSL networks, a FTTH solution is clearly a competitive imperative. This appears to be particularly the case in Europe. In a recent study prepared for Cable Europe, Fitch Ratings said European cable operators are using Docsis 3.0 upgrades to achieve much greater capex efficiencies than their telco rivals. As a result, Fitch said, incumbent telcos already reluctant to invest in fiber are finding themselves at an increasing competitive disadvantage. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 7

8 "This resistance to invest in fiber has been further exacerbated by ongoing decisions on whether to invest in fiber to the curb, fiber to the home, or a hybrid of the two, and where and when to invest," wrote Stuart Reid, senior director of the TMT Group at Fitch Ratings. Due to their service providers' delayed pursuit of greater bandwidth capacity, many pay TV subscribers have yet to enjoy the benefits of triple-play services. Even in the relatively advanced US entertainment market, a consumer survey conducted by Heavy Reading in fall 2009 found that more than 44 percent of respondents are still not getting more than one service from their pay TV provider. A much smaller portion is taking three or more services from a single provider. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 8

9 IV. Benefits of Delivering Triple Play Over FTTH Telco service providers can reap numerous benefits from delivering triple-play bundles to their customers, particularly over FTTH networks. In this section, we will highlight some of the primary benefits of triple-play offerings for network operators and their subscribers. For telco service providers, the most obvious benefit is the increased revenue from delivering more services to customers, both existing and newly acquired. In particular, telcos can generate substantially more revenue per subscriber by adding basic multi-channel video and advanced video services, such as VoD and PVR/DVR, to their existing phone and data offerings, as video services are typically priced higher than voice and broadband products. Video services also tend to be less price-sensitive than voice and data services, thus commanding a higher premium. Besides boosting ARPU, the introduction of triple-play services is likely to boost penetration rates and foster lower customer turnover for service providers. Cable operators regularly report that their "stickiest" subscribers are the ones that receive multiple services, at least partly because of the convenience factors. Plus, the more services that a subscriber takes from one provider, the less likely that subscriber will defect to a competitor. Lower customer churn means network operators receive revenue from the average subscriber for a longer period of time. Reducing churn rates also means providers do not have to spend as much time or money recruiting new subscribers to replace the ones that left, and will see savings in connect and disconnect service calls. The financial payoff seems especially promising when the triple-play bundles are delivered over all-fiber networks. In a recent study conducted by John Staurulakis Inc. and SNL Kagan, broadband penetration rates for telcos surged from a range of 25 percent to 35 percent of homes passed beforehand to a range of 45 percent to 60 percent after they carried out FTTH upgrades. In reporting the study results, Valerie Wimer, VP of John Staurulakis Inc., suggested that FTTH deployments also boost revenues because more customers sign up for premium-tier services. For instance, telcos with FTTH networks reported that 30 percent to 55 percent of their broadband customers now paid for 10-Mbit/s broadband service a vast improvement over what providers typically generate on legacy copper networks. Besides these direct economic benefits, telco service providers stand to gain the advantages of optimized network utilization from the packaging of triple-play bundles. Next-gen OSS solutions provide the key to achieving this optimized network utilization. With the deployment of an OSS solution based upon SOA and industry standards, telcos can move their different services out of separate, isolated silos and onto a single, consolidated services platform, thereby improving operational efficiencies. By unifying the services layer, telcos can also deploy new products faster and activate new subscribers more efficiently, with less order fallout. With the assistance of the right OSS solutions, telco service providers can also reap the benefits of integrated subscriber service management. Taking advantage of the new unified service layer, providers can boost productivity by automating provisioning and activation of all new subscribers. They can also provide better customer service and deliver greater personalization. Finally, with the rollout of IPTV in triple-play packages, telco service providers can move away from their dependence on satellite TV providers for video services. Instead of having to integrate their operations and thus share video revenues with satellite providers, telcos can keep their operations separate and, more importantly, keep all the video revenues for themselves. The delivery of triple-play bundles brings many benefits for telco subscribers, as well. The list includes more services; improved personalization capabilities; competitive pricing; single, unified bills for all services; and overall better user experiences. As a result, subscribers enjoy higher customer satisfaction, leading to lower churn rates. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 9

10 V. Challenges of Delivering Triple Play Over FTTH While the potential benefits of delivering triple-play service bundles networks over FTTH networks are considerable, the challenges are also great. In this section, we spell out and address some of the major service fulfillment and other challenges of offering triple-play bundles over fiber. Even though their networks are different, telcos and cable operators face fairly similar triple-play service fulfillment challenges. Both types of providers must support a wide swath of digital video and broadband services, including digital TV, VoD service, premium video programming, PVR/ DVR service, ultra-broadband tiers, speed bursts, and VoIP. Thus, the standards-based OSS solutions that work for one group of services providers usually work for the other group, as well. For network operators of all stripes, a chief challenge is the complex provisioning requirements of fiber lines. Service providers must find ways to support and provision the many passive OLT and ONT devices from various vendors on both the access and transport networks. A second key fulfillment challenge for telco service providers is the support of more IP-based devices located beyond the ONT endpoint. These IP-based devices include IPTV set-top boxes, home media gateways, IP phones, modems, and routers, and they are produced by many different vendors, making device interoperability and integration a huge headache for providers. Increased service personalization presents another prime challenge for providers. To keep subscribers satisfied with their triple-play offerings, telcos must customize their various services across all the different domains, not just the TV, PC, or phone. With the advent of the ipad and smart phones, subscribers will want, and increasingly expect, all anywhere/any-device access to the services that they have purchased. Bringing new services into their portfolio poses one other major challenge for telcos. Increasingly, telcos will need to add, provision, activate, and support new services, features, and applications quickly to adapt to rapidly shifting market conditions. This is particularly evident in the fiercely competitive video space, where programming needs and demands are constantly changing. Not surprisingly, cost containment is a big issue. At a time when revenues per line are still eroding and the ARPU for various services remains competitively fixed, it is mandatory for providers to keep the lid on capex and opex. In particular, cost containment is critical during the implementation and deployment stages of new networks and services, when the fixed costs are high and additional revenue sources are limited at best. Other notable implementation challenges include the need to: manage multiple services and technologies manage new SIP technologies and devices acquire and manage content ensure individual service quality and prioritization Further, telco service providers will need a back office that allows them to develop new business models, including usage-based, transaction-based, and advertising-based models. The next-gen back office should also permit them to support new services beyond voice, TV, and data, such as OTT video, broadband caps, and mobile broadband. And the OSS solution should enable telcos to expand their portfolios from triple-play bundles to quad-play and even larger packages. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 10

11 VI. Best Practices for Delivering Triple Play Over FTTH Fortunately, while the IP service fulfillment hurdles spelled out in the earlier section may seem quite daunting at first blush, they can all be overcome. In this section, we will identify the most highly recommended practices that telco service providers can use to address the challenges in delivering FTTH-based triple-play services and compete more effectively. First, telcos should carry out product and service catalog integration. Instead of having to deal with unsynchronized product and service information dispersed in different silos throughout the networks which hinders operators' ability to make coordinated use of catalog information telco service providers will be able to use an integrated product and service catalog to create a single view per subscriber that enables real-time upsell and convergent prepaid/post-paid opportunities. Using the appropriate OSS solutions, telcos can organize and manage all the product and service data so that they enjoy complete control over product design, creation, and reuse. With this integration, providers can bring new products and services to market quicker, easily develop tripleplay and even quad-play offers, and add or change vendors without disrupting their operations. Furthermore, telco service providers can deliver a common user experience across all devices inside and outside the customer's home. Second, telco service providers can integrate their business support system (BSS) and OSS order management systems. Despite offering a mix of IP and legacy services, they can reduce the complexity of their operations and cut high order fallout by meshing the different order management systems together. BSS/OSS order management integration also enables telco service providers to cut bundle processing costs, improve the accuracy of their orders, and eliminate time-consuming swivelchair processing by their customer service representatives. Such integration also allows providers to institute flow-through automation, virtually eliminating cumbersome and error-plagued manual order processing. In another recommended practice, telco service providers can unify all of their precious customer data in one central location. Breaking away from the separate silo approach that is standard now, they can create a centralized customer information model, federating the subscriber data from many disparate sources on their networks. What is more, telcos can potentially look to mine that data as a new revenue opportunity. With this customer information model solidly in place, telco service providers gain a data resource that can support order management, provisioning, activation, resource management, and service authorization. The model also offers a trove of information that can be used for management reports and marketing purposes. In addition, the customer information model allows providers to: define new services, technologies, and business processes rapidly slash operational costs with end-to-end order management substantially reduce problems with data integrity Moreover, telco service providers can create strong support for their emerging multi-technology networks. With cross-domain service fulfillment increasingly needed to gain the maximum benefits from triple-play bundles, providers can find ways to stretch the capabilities of their in-house development and legacy OSS systems without straining them to the breaking point. As mentioned earlier, the new IP-based networks are increasingly complex, filled with a wide variety of network elements from multiple vendors and countless new devices with more complex interfaces to provision. But with the right OSS solutions, telco service providers can create one single OSS platform to support all of their offerings and move and reuse the services on all net- HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 11

12 works. They can create standardized interfaces to foster extensible integration between the BSS and OSS. Plus, service providers can use the freshly unified customer data to target subscribers with marketing and advertising campaigns and up-sell advanced products and services to them. Finally, telco service providers can meet the fulfillment challenges by choosing equipment and software vendors that adhere to the latest common industry standards. OSS solutions based on proprietary standards are not designed to cope with the swiftly increasing scale of networks, diversity of communications technologies, tight time to market for new services, and heightened expectations for service availability and reliability. Only open OSS standards are up to this formidable task. Using these proven best practices, telco service providers can cut the time intervals from bundle orders to service activation, slash costs for launching new services and products, and isolate the upstream processes from the evolution of their networks. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 12

13 VII. Importance of OSS Standards The adoption and implementation of key open industry standards play a critical role in meeting the IP service fulfillment challenges of telco triple-play. Without the use of these open OSS standards, telco service providers will find it quite difficult to carry out all the steps needed to transform their networks into next-generation operations. This section briefly touches on the important role that such standards play. A prime example of the importance of open standards is the TeleManagement Forum's OSS through Java Initiative. Known more commonly as the OSS/J Order Management API Specification, it standardizes how an order capture system, either billing or customer experience management (CRM), communicates with an OSS service management system when handling product, service, or work orders designed to be provisioned across a provider's service delivery network. As a result, it enables OSS providers to interoperate fully with certified BSS and CRM vendors, removing a major bottleneck that slows the rollout of new services. Thus, the TeleManagement Forum spec, also called Information Framework JSR-264, can lead to speedier service rollouts, greater operational efficiencies, and reduced service deployment costs. In fact, spec proponents estimate that deployment costs can fall by as much as 30 percent. Unlike earlier versions of the API, which dealt only with service activation and provisioning, the new standard also addresses resources, work orders, and other capabilities, giving it a broader set of functionality. Therefore, OSS solutions based on this API can easily reuse existing subscriber, service/network inventory, and order management domain information, further reducing development and integration costs. SOA-based OSS architecture is another prime example of the value of open standards. By adhering to this standard, service providers have the ability to reuse a defined set of triple-play services over any type of IP-enabled network, whether it's FTTx, DSL, Docsis, WiMax, etc. This ability to reuse service definitions is imperative as network operators seek to increase their deployment footprint and broadband penetration by utilizing multiple network access technologies. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 13

14 VIII. Conclusion Like it or not, the triple-play services era has clearly begun. Cable operators are already offering or rolling out triple-play services throughout the world. They are upgrading their HFC lines for Docsis 3.0 wideband capacity in many regions. And they are extending fiber lines deeper in their networks to subscribers' home. So it is high time that telco service providers started responding just as aggressively, if not more so. What this means is that service providers must start offering compelling triple-play and even quad-play packages of their very own. In particular, telcos must start offering IP-based video services to compete with the rich offerings of their cable, satellite, and other rivals. Also, telcos should look to deliver all of these new services over all-fiber networks, not DSL-enhanced copper lines, so that they can match and surpass cable's expanded capacity and start differentiating their products and services from the competition. To be sure, the IP service fulfillment challenges of delivering triple-play services over FTTH networks are great and will not be easy to meet. As spelled out earlier in this paper, those challenges include the complex provisioning requirements of fiber lines, the need to support numerous IP-based devices, the operational demands of increased service personalization, and the need to add, provision, activate, and support various new services and features quickly. The challenges also include the mandate to contain capex and opex at a time when other fixed costs are already running high and fresh revenues have not begun rolling in. But, as we have seen, these grand operational challenges can be met and overcome. With the right OSS solutions firmly in place, telco service providers can compete much more effectively by integrating their vast product and service catalogs, unifying their far-flung customer data in one central repository, and integrating their separate BSS and OSS order management systems. Telco service providers can also create robust support for their multi-technology networks, thus enabling them to stretch the capabilities of their existing OSS and BSS without breaking them. Finally, telco service providers can choose vendors that provide standards-based OSS solutions to reduce integration and implementation costs. In short, telco service providers can fight back with fiber lines and other new architectures, just as long as they have the right OSS support solutions to back them up. With the proper back-office solutions at their disposal and the best practices to support them, telco service providers can achieve the great promise that FTTH technology offers, boosting revenue and customer loyalty. As a result, they can turn the telco triple-play into a grand-slam home run. HEAVY READING DECEMBER 2010 WHITE PAPER TELCO TRIPLE-PLAY SERVICE FULFILLMENT 14