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How Telecom Service Providers will Evolve in 2015

Around the world, many telecom service providers are in a state of transition, as their traditional voice and data communications service growth opportunities are either limited or in a decline.

Meanwhile, the need to pursue new revenue opportunities has often been restricted by a historically slow moving organization and underlying infrastructure constraints that essentially made them inflexible to address the need to change.

Therefore, during 2015, selective organizational restructuring and fundamental infrastructure transitions will be implemented to enable these telecom service providers to adapt more effectively to the apparent new opportunities in the marketplace.

Much of the change will be driven by the deployment of new software, systems and related professional services from vendors with domain experience in managing these business model transitions.

Adoption of next-generation technologies by telecom service providers has led to worldwide growth in the Operation Support Systems (OSS) and Business Support Systems (BSS) software market, which is expected to post a CAGR of 17.85 percent from 2015 to 2019, according to the latest market study by TechNavio.

The single invoice technology for multiple telecom services in telecom companies has been made possible because of the shift to integrated next-generation technologies -- replacing the disjointed legacy system silos of the past.

The latest report by TechNavio highlights the outsourcing of OSS/BSS service functionality to managed service providers as a major reasons for growth in this sector.

Most telecom operators are experiencing lower profit margins, due to a decrease in the average revenue per user (ARPU), which has pushed many network operators into debt.

In order to reduce operational expenses, some telecom operators have chosen to outsource most of their service functionality -- such as infrastructure, operations and management -- to vendors who can help to optimize their business based upon proven best practices.

"OSS/BSS software implementation and maintenance requires a highly trained workforce, therefore most operators outsource their OSS/BSS functions to managed service providers," says Faisal Ghaus, vice president at TechNavio.

He adds, "Outsourcing of OSS/BSS service functionalities enable operators to maintain profit margins and achieve a high service level agreement."

In addition, increased usage of cloud computing in OSS/BSS is also expected to propel market growth, as it provides flexibility and reduces the typical service provider operational expenses.

The service provider migration to open source technologies, white label hardware, Software Defined Networking (SDN) platforms and Network Functions Virtualization (NFV) will also help to accelerate this ongoing transition to a lower-cost and significantly more agile business model.

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