Outsourcing Roaming is about more than Business Process, or Cost Re-engineering. It is about Business Optimization

By Ben Bannister, Product Marketing Manager, MACH

In conjunction with network and device technology developments, MNOs also need to consider how their business models will need to evolve to cope with future developments. There is a continuing trend away from trying to own and control every part of the service delivery process (Network, Retail, Contact Centre, CRM, Roaming, Billing/OSS, Content Delivery Chain) towards an acceptance that a communications service provider does not have to own and manage all of these elements itself, in order to provide a successful and profitable communications business.

These trends raise an important question – what exactly will constitute a communications service provider in the future? A decade ago, outsourcing, whether of the network or some other business process, was rare, but now it is becoming increasingly common-place, accepted even as a mainstream approach. There is one exception to the historical bias against outsourcing, and this lies in the area of roaming clearing house services. From a relatively early stage in the development of wireless communications, of whatever flavour, mobile phone companies were working with clearing houses to manage their inter-company roaming processes. Perhaps this ‘exception’ gives us an indication as to what makes one part of a business seemingly more appropriate for outsourcing, while other parts of a business are retained in-house.

The roaming process is perhaps fortunate, in that inter-company data exchange procedures, process management and governance have been very clearly defined and developed by 3rd party trade associations. This saves the industry from the need to try and work through the added burden of data and process inter-connectivity, in addition to the ongoing massive volume of commercial bi-lateral agreements that have to be established and maintained. Also, as roaming came to be seen as a somewhat commercially neutral process, the management of the tasks associated with roaming probably made more sense for neutral clearing house companies to manage, under the strict governance of the various trade association committees. As roaming is now a very well-defined and understood process for operators to exchange roaming data and complete financial transactions, it is logical to scrutinize related wholesale processes, with a view to identifying candidates for both efficiency improvement (cost reduction) and effectiveness improvement (revenue generation). Such improvements  might be realized through either extending the footprint of roaming related services, as provided by a trusted 3rd party clearing house relationship, as well as looking at other, in-house wholesale processes that might also benefit from either the efficiency or effectiveness, or both, that can be associated with an external provider of such services.

As markets become more sophisticated, the range of outsourcing options becomes more varied and flexible. Roaming clearing houses traditionally managed TAP or CIBER data processing, reconciliation and settlement. While some, but not all, included the management of invoicing and financial settlement processes. This quite narrow definition of roaming outsourcing is now complemented with a range of value added services from IREG/TADIG testing through TAP creation, IOT discount management and IOT check processing to re-rating and re-pricing services. Roaming outsourcing can now include the provision of comprehensive business intelligence tools, near real-time roaming data exchange (NRTRDE), sophisticated revenue assurance and fraud protection processes and CAMEL services for prepaid roaming. Financial settlement services can include automated reconciliation, invoicing, multi-lateral settlement and debt recovery capabilities.

Quite apart from providing a huge array of value added services, a clearing house now also delivers services and processes with diverse options that include traditional bureau-based approaches, whereby the outsourcing provider not only runs all processes in its own data centre, but also provides people, processes and managed service expertise. In addition to bureau services, which are a traditional clearing house business model, more recent developments have included the provision of hub-based services whereby tools and processes are delivered within the context of a multi-lateral hub model, providing immediate and extensive coverage, and agreement management with multiple roaming partners, but with a fraction of the effort associated with bi-lateral relationships. The next logical step in outsourcing arrangements involves the clearing house providing a complete outsourcing solution, managing people, processes and data, whether within a mobile operator’s own premises or separately.

With a broader range of outsourcing models and a more comprehensive array of services at their disposal, it makes sense for mobile operators to think about their outsourcing options. Operators have many different reasons for wanting to consider outsourcing, but usually there are two main reasons, as discussed above – realizing more operational efficiencies in the operators’ business or achieving a greater degree of commercial effectiveness or both. For mobile operators, access to ‘best-in-class’ processes, access to supplier expertise,  the need to re-engineer costs, or a requirement to re-focus resources on core business & customer requirements, all re-align in one way or another with the twin objectives – realising efficiency and effectiveness.

 

About MACH

MACH connects and monetizes the telecom world with cloud-based, managed communications services that monetize mobile data, simplify interoperability between networks, optimize wholesale processes and protect revenues. Combining its flair for successful innovation with its long heritage in data and financial clearing, settlement and hub based connectivity models, it provides its 650 operator customers with the real-time, value added services necessary to succeed in 3G and new 4G mobile ecosystems.
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