The 5G service provider: how BSS will drive change
It’s no secret that the rollout of 5G is opening up a wealth of new opportunities for service providers beyond their traditional markets. However, to successfully capture them, an organizational transformation must take place. In this blog post, we explore how with 5G-enabled business support systems (BSS) service providers can evolve their traditional role and enhance their position in the value chain.
It’s an exciting time for communications service providers. As 5G rollouts accelerate, an unfathomable number of new use cases will emerge – allowing service providers to significantly expand the number of services they offer to both businesses and consumers. However, although 5G opens up many new opportunities, it also presents new challenges for service providers.
From sales and marketing to operations, IT, network management, pricing, and billing, there will be enormous changes that service providers must plan for. To support this transformation, 5G-evolved BSS will be key to success – helping service providers evolve from traditional network developers to service enablers for 5G and IoT, and ultimately to service creators with the ability to collaborate beyond telecoms.
From network developer to service creator: the three steps of evolution
During the transition to 5G service providers need to plan for the strategic evolution of their value chain role. Mats Karlsson, Head of Business Support Systems at Ericsson, explains: “We foresee service providers playing three distinct roles in the 5G-enabled world. These roles allow service providers to provide increasing value from 5G network infrastructure, from offering tailored connectivity solutions and digital 5G platforms to building their own processes and offers including massive IoT.”
Role 1: the traditional network developer
In this role, service providers act solely as a mobile connectivity provider by offering solutions such as mobile internet and communication services, and it’s mainly business as usual. Here, service providers’ 5G business models are mostly consumer-focused and their role in the IoT ecosystem is limited.
Role 2: the service enabler
In the service enabler role, the service provider extends its services by leveraging additional capabilities such as cloud, edge and IoT enablement – shifting focus to enterprise customers. At this stage, the service provider is an enabler for 5G and IoT and acts as a supplier of customized connectivity and platform services.
Role 3: the service creator
In the third role in the value chain service providers transition from being a connectivity and platform provider to creating new digital services and collaborating beyond telecoms to establish digital value systems. At this point, service providers will partner with a wide ecosystem of suppliers to deliver new services all the way up to full IoT solutions.
This figure shows examples of the typical business models enabled by the three CSP roles. The combined opportunity for those roles is expected to reach USD 700 billion annually by 2030, but deciding on which role to take on over time will be challenging. With that in mind, we believe a stepwise BSS capabilities evolution will be crucial for service providers seeking to monetize 5G and establish a new role in this value chain.
Supporting all three roles with 5G-enabled BSS
This step-by-step evolution of the service providers’ role must run parallel to an evolution of BSS capabilities. The first is “5G-enabled BSS”, which supports 5G standards, and features like virtualization (NFV) and network slicing, while maintaining end-to-end business capabilities such as support for roaming partners.
The second BSS evolution is “B2B, IoT, and edge”. Here, BSS supports device management at IoT scale while also supporting service exposure, new revenue models, and billing-on-behalf-of. This step focuses on supporting enterprise customers.
The final step in 5G-enabled BSS evolution is a “full IoT Ecosystem,” which consists of partnership-driven relationships in which IoT and edge partners are customers and suppliers, or both at the same time.
It takes an ecosystem
To take advantage of the infinite possibilities that 5G unlocks will require a strong ecosystem of partners, and collaboration will become the baseline for success. Partnerships will include hardware and software companies, new emerging entrepreneurs, the traditional telecom, digital players, and large and small innovators — all of which can bring the specific application and domain expertise needed to exploit new niches.
As outlined in the latest MIT Technology Review report – The 5G operator – service providers are increasingly focused on establishing creative new business-to-business and business-to-consumer partnerships, as well as partnerships which enable IoT and other new services. Telecom executives interviewed for the report identified these partnerships as integral to future success, particularly when it comes to delivering on enterprise opportunities.
As a result of these increasingly complex partnership networks, one of the primary roles of BSS will also be to manage service providers’ relationships with stakeholders by keeping track of agreements, handling orders, generating reports, sending invoices, debt handling and so on. In the past, these stakeholders were generally limited to consumers, resellers, partners and suppliers but for the 5G/IoT business, though, more complex ecosystems are arising.
I believe the insights from this report will be critical to many 5G operators considering the step-by-step approach to BSS evolution as they move toward a multi-dimensional ecosystem of customers and partners.
For more information about the evolving role of the service provider and the importance of BSS in realizing 5G opportunities download the full MIT Review Insights report.Download report
You may also be interested in the Ericsson Technology Review article: 5G BSS: Evolving BSS to fit the 5G economy
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