Carriers are looking to consolidate operations support systems as a way to eliminate duplication, increase efficiency and lower their costs. Consolidation of service providers seems likely to continue in this tough new environment. Wireless operators are launching new data networks in which content plays a major role. And data traffic is growing, but revenue tied to that traffic is lagging. That's why mediation is becoming increasingly important to public service providers on a number of fronts.
As the word suggests, mediation is about collecting and translating data among various systems (such as billing, fraud control, network management, provisioning and traffic management) under the OSS umbrella. Some mediation systems also combine data from multiple sources and can even verify content for accuracy.
The Yankee Group forecasts the market for network data mediation will grow from $327 million in 2000 to nearly $1.2 billion by 2005.
Intec Telecom Systems this fall announced the biggest mediation deal in the company's history. As part of a multimillion-dollar deal with SBC Communications Inc., which runs through 2007, the RBOC will consolidate 20 separate collection systems, which gather billing data from various networks, ranging from IP to traditional telephony and wireless, into three systems with the Intec Inter-mediatE solution.
Rick Woods, Intec's vice president of product management and business development, says consolidation among the Bells has left the RBOC with disparate networks and OSS platforms. Mediation can be used to consolidate some of those systems. Following this particular RBOC's consolidation via mediation, SBC will have three identical physical collection sites in place; the company settled on three for disaster recovery purposes, Woods explains.
However, the opportunity that really has mediation vendors salivating is the new wireless data networks service providers are launching around the world. In this case, mediation will act as a bridge between the wireless network operators and the companies that provide games, information or other content over those networks to end users.
To capitalize on that opportunity CSG Systems is set to launch the eighth generation of its CSG Data Mediation product. The most significant addition to this new release is its enhanced collection capability for GPRS support. Specifically, CSG had added to its product the function of a charging gateway. That means service providers don't have to put in an extra device to handle protocol conversion and consolidation of usage data from various network nodes, explains Mark Quaglia, product manager for CSG Data Mediation.
Meanwhile, ACE*COMM has built a prototype platform for GPRS, says Martin Demers, senior vice president and chief marketing officer at the company. ACE*COMM has been involved in responding to some RFPs on GPRS, says Demers. GPRS, which is still a very young market, will only make sense if carriers charge for usage, he says, but today these service providers are charging only on a flat rate.
"We think mediation will be important because you mediate among a lot of different things," says Larry Goldman, program director for OSS at research and consulting firm RHK Inc. "Service providers introduce new services and want to collect information [about the services, translate the information into the correct format] and roll that in to a billing system."
Goldman says there was a 100 percent increase in data traffic last year in North America, but the service providers showed only a 17 percent increase in data traffic revenue. Part of the reason for the discrepancy, he says, is that service providers haven't been able to figure out how to present something of value to customers because it's hard to collect data on things that are billable. Mediation, he says, will allow for more usage-based billing vs. flat-rate billing. That's good news for service providers that are rolling out wireless data or other new services, he says.
Mediation is a key source of understanding what the customer is doing, explains Steve Borelli, CSG's executive director of new products. "We see the demand [for mediation] increasing because of a need to know what's going on in the networks," he says. "Also there's an increasing demand in knowledge of customer activity beyond just billing."
CSG offers predictive customer analytics to enable the service provider to learn if customers are paying, what their usage is, whether their usage is increasing or declining and a variety of other information, he says. "We have two key indicators -- the likelihood of a customer to churn and the likelihood of a customer to buy another product."
The company is seeing traction in that area, he says, because it offers more than raw data and features specific applications such as churn control. "We are in production with a couple trials of these applications with service providers doing triple play [strategies]," he says.
