TBPO: Yes It's About Money; But Not just Money
- Are you looking for a solution that offers a cost-effective method to keep your staffing and technology investments to the bone, and also to ensure that your cash register keeps ringing?
- As a telecom provider, will a solution that accelerates your billing implementation and allow you to pay-as-you-use, add value to you?
- A solution that is a substitute to purchasing licenses and owning a billing system - is it what you long for?
- Are you a start-up telecom or niche service provider looking for a wide-ranging billing solution?
If your response to any of the above questions is a 'yes', then a secure, state-of-the-art service bureau is the resolution. In other words, what the industry veterans call 'TBPO - Telecom Billing Process Outsourcing', is the answer for you.
Telecom Billing Process Outsourcing (TBPO) has been a common practice mostly among operators in North America and Western Europe, where the markets are more developed - mostly among Wireless and Wireline players. The period 2000-'02 saw operators like Sprint, Cox Communications, AT&T Wireless, Allstream in US and operators like Telewest, Vodafone Hungary, npower communications, Tesco, ntl Ireland in Europe adopt TBPO models.
While the US service providers were the pioneers to adopt this model, by 2004, there were an equal number of players in Europe - with operators like Hutchison, Swisscom, Tele2 UK, O2 UK, and 3 Italia joining the bandwagon- who had sensed the virtues of TBPO.
Recently, service providers in the APAC region have started to embrace this model, with almost a billion dollars worth of telecom billing process outsourcing deals already signed, as per a recent survey. These include operators like Indosat and Vibo. There has been some vigor in the Middle East as well, with players like Wateen and du adopting this model, especially for niche areas like interconnect.
Reasons are aplenty...
Operators take to TBPO for various reasons. The big operators (Tier 1) lean on TBPO as it provides access to skills and knowledge that the operator does not have or cannot retain. Outsourcing customers appreciate the first-class business and technical skills that the outsourcing firms can bring, as staff with high-quality IT/billing skills can be hard to find. Moreover, the availability of a back-up, if things go wrong, is also a major attraction for the big operators. When the complexity increases and patches in existing in-house billing systems increase, operators face problems with the existing systems. This urges them to consider the outsourcing option, particularly if these problems are constraining innovation, causing customer dissatisfaction or leading to revenue leakage.
Some operators, especially Tier 2 players and new entrants, take the TBPO route in order to avoid huge investments to own billing systems. The predictability of cost, across the span of an outsourcing contract is particularly attractive to companies which have financial constraints or start-ups. Outsourcing reduces the lead-time needed by a new company to set up operations, to a great extent.
For new entrants like MVNOs and WiMAX players, speed-to-market is crucial. So, owning an entire network and all its operations becomes a less desirable strategy, especially when skilled workers and venture capital are scarce resources. Building services from the ground-up can exhaust years of effort, during which time the marketplace could witness several profound shifts. Thus, a TBPO model, apart from being cost-effective, also gives these operators a transparent adoption to new generation of services and technology, while enabling them to focus on core activities and capabilities.
...and so are your options!
Considering their strategies for billing and related processes, telecom operators and service providers have a range of options: retain all billing-related processes in-house, or outsource some or all of these processes or outsource billing together with other processes. Based on these requirements, the business models that have evolved are:
Type |
Characteristics/Imperatives |
Out-tasking |
Organizational complexity and time |
Full outsourcing |
Competitive imperative |
Hosted services/Service bureaus |
Speed-to-market and innovation |
What is now seen mostly, is a shift from the traditional out-tasking model to a hosted services model. Billing and related services make up for the largest and fastest growing portion of the service bureau market.
The primary drivers of growth in this market segment are the newer wireless carriers, long distance resellers, and competitive local exchange carriers (CLECs) that have entered the market in the last few years.
The evolution has seen operators move from resource-intensive outsourcing model to a more functionality-rich and minimal resource oriented models.
The outsourcing industry's new detour with start-ups and resellers like MVNOs and WiMAX players demands end-to-end functionality extensiveness as well as infrastructure support. This is possible with the Service Bureau model. TBPO providers are outsourcing firms that own the required infrastructure and have licensed off-the-shelf end-to-end functionality complete billing systems. The service bureau model has the caliber to ignite the latent potential in this market by abating the entry barrier.
The choice to buy or rent is yours - whatever engagement model you decide on, SunTec can provide you with what exactly you want.