This Industry Viewpoint was authored by Andrew Whitelaw, CEO of Springboard
Origin-Based-Rating (OBR) is being rolled out in a growing number of markets globally, creating new challenges for voice service providers and MNOs. They are being challenged to maintain and grow margin as new surcharges are appearing on their bills often six months or more after a service has gone live.
MNO voice revenues are predicted to drop from $381 billion in 2019 to $208 billion by 2024 as estimated by Juniper Research. This drop of 45% in revenue comes from subscribers choosing more flexible and free Over The Top (OTT) alternatives, hence the call for innovation could not be more necessary.
It is critical that organisations understand the constantly changing global OBR landscape to avoid facing surcharges and unexpected bills. With the competition and constant evolution in the market, service providers are facing avoidable penalties and losses by failing to proactively prepare for expanding requirements.
The shift telecom regulations are undergoing paired with the rise of OBR, brings a new level of complexity to the surcharges faced by service providers. Juniper Research values the voice market at $208 million and it is presenting vast opportunities, meaning the door for business opportunity is wide open but the risk still remains. To avoid falling revenues and margins from loss of demand, it is essential service providers adapt and shield themselves from risk.
Surprises With a Cost
The number of markets in Europe and around the globe adopting OBR is increasing exponentially, however, it can present extensive threats to service providers:
- Bill Shock – Billing possibilities are volatile and without the correct intelligence or routing capabilities, businesses will fall apart when it comes to facing bills that have the potential to cut their narrow margins. Costs cannot simply be passed onto carrier partners, so the MNO or service provider is forced to absorb the cost.
- Penalties – OBR penalties can mean an increase of a huge 3,500% over the standard voice-calling termination rate resulting in subscribers being pushed to OTT players as mobile operators cripple at the cost.
- Surcharges – OBR considers the location the call is made from when applying surcharges to carriers, not considering the receiver’s destination and termination of a call. The difficulty for carriers in managing routing and pricing independently means surcharges are disrupting their ability to maximise resources.
Subscribers want stability across their voice and messaging avenues. OTT players such as Skype, WhatsApp and Facebook Messenger provide that, posing a threat to traditional service providers. Knowing the exact monthly cost of subscription-based services puts subscribers’ minds at ease, and carriers must take steps to compete with this incentive.
MNOs are losing revenue whether they choose to absorb the hard hits or pass them on to subscribers who migrate to OTT players.
Gaining Visibility by Utilising Automation
Ensuring your business is OBR compliant is a must. MNOs are unlikely to gain any visibility on extra charges until it’s too late and they have been charged. Accessing minutes on demand to make real-time decisions reduces the resources invested in manually reconciling, disputing or passing charges onto subscribers. Being equipped to note potential issues or charges allows service providers to act quickly and achieve a fast resolution.
Benchmark reporting allows users to set standards for acceptable quality, removing any doubt carriers may have as to whether they are compliant or not. Increasing visibility and accessing better insights and analysis into traffic quality enables them to form decisions based on managing traffic to remain OBR compliant. This can be done simply and seamlessly by adopting an automated approach. While MNOs can keep margins largely predictable, third-party teams are at hand to share their expertise if discrepancies are raised.
MNOs consistently miss out on significant revenue by failing to ensure billing processes are dependable, robust and up to date. Utilising the correct technology creates a balance between user-defined business rules and pre-existing processes. They can remain compliant with OBR regulations without authentic traffic getting caught in the crossfire.
By employing a long-term partner with an established reputation and proven track record for reliable traffic analysis, carriers are set up with an understanding of the industry and its requirements, freeing them of the manual strain.
Preventing Losses and Protecting Margins
It is fundamental that MNOs and carriers look at their Operational Support Systems (OSS) and Business Support Systems (BSS) and take proactive steps towards avoiding bill shock. Traditional voice and messaging providers cannot afford any revenue leakage to OBR regulations so by implementing advanced and automated intelligence, businesses can prevent any traffic blind spots.
MNOs cannot be complacent and let their reputation and subscriber count be put at risk. They must gain optimal control over traffic quality to make better-informed decisions and prevent unforeseen charges. As OBR Is becoming more widely adopted, the time to act is now to give MNOs the best chance to prevent unnecessary losses and protect margins.
Andrew is the Founder and CEO of Springboard, a platform provider for managing and optimising voice and messaging businesses. He is a veteran software developer and routing expert with decades of experience transforming business intelligence for start-ups through to Tier 1 telcos.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!Categories: Government Regulations · Industry Viewpoint · VoIP