Omdia publishes some nice research, and I found a recent piece, “Telco Software Evolution Survey—2025” to have some interesting implications I’d like to develop. I agree with the key points on the factors buyers consider most, but I’ve had many comments on OSS/BSS systems that I’d like to roll in with the buyer-interest material to get a line on the direction telcos are heading with OSS/BSS, and in general. The comments I draw from the report come from the LinkedIn figure; the report itself is behind a paywall.
OSS/BSS systems are the “core business applications” of the telecom world. In their original conception fifty years ago or so, they did almost everything, from tracking equipment and lines to managing the “craft” people who did all the outside work. They also billed, accounted, and all the other stuff. But over time the monolithic nature of OSS/BSS became a barrier to progress, even though it wasn’t clear just where that “progress” was taking things. But the role of the OSS/BSS, and the criteria for picking one, is a good indicator of where telcos think their business is moving, which is why the Omdia figure is interesting. I don’t want to include it here since it’s copyrighted, but you can find it on LinkedIn or (if you pay) in the report.
To me, the thing that jumps out the most is the criteria figure that was reproduced in LinkedIn. The top criteria are “defensive”, criteria that suggests that telco software has no meaningful feature differentiation, which suggests a commoditized market. Not only that, the next four are “cosmetic”, things that my own chats with operators indicate have come from simply parroting the current market buzz. Cloud-native, a product roadmap, tech innovation, flexible service models? You don’t just repeat market buzz if you are responding to real market forces.
Those forces are represented in the criteria list starting with the “Ability to support managed and professional services” and including all the rest besides “Financial stability”. These are the indicators of at least some thinking about true market opportunities and risks. That none get more than a 25% vote is a pretty powerful indicator of commodity-thinking. That the TM Forum work is all consigned to a 21%-or-less support level shows, IMHO, that telcos don’t want to spend on modernizing OSS standards, without any compensating benefit they can see.
So what about what I hear? To me, the interesting thing here is that the whole question of OSS/BSS has been debated for well over a decade. Among the CxOs and chief planners I talked with and met with back in 2013, half were interested in “modernizing” OSS/BSS and the other half in eliminating it. Today, gathering data from 72 operators who commented on the topic, I’m seeing 59 who want to ignore the OSS/BSS topic completely; it’s just legacy plumbing in their minds. The rest are roughly half-and-half divided as they were 12 years ago. The reason for the shift is the view that the telco world is now a world of cost management—that nothing is going to happen on the revenue side. Those who do see some future in revenues are primarily those looking at something like FWA as a means of breaking into new market areas, or things like data/cloud/AI sovereignty as a pathway to building some non-telco service business.
That raises another interesting point. In the past, I’ve chided telcos for thinking they could raise revenues by some simple repackaging of their current service capabilities. This attitude, I think, fits into the “flexibility of commercial models” category of criteria in the Omdia list, which had only 24% support. Interestingly, of my chats, 82% have given up on OSS/BSS creating differentiation, which is close enough to the percentage who rejected the “flexibility of commercial models” criteria in the Omdia report.
What this all boils down to is that most operators don’t think that OSS/BSS upgrades can create new revenue opportunity. Not only that, that 82% of operators tell me they don’t even see a need for OSS/BSS change suggests that they either don’t see any new services at all, or don’t see them falling under OSS/BSS control. That, to me, suggests that the dual example I offered of FWA-driven or sovereignty-driven opportunity represents the type of thing they believe will bring in any new revenue that’s possible. The former doesn’t really require an OSS/BSS change (the service is the same) and the latter is an example of an OTT service that wouldn’t change OSS/BSS or perhaps even use it. Telcos don’t see telecom as a growth market. They’re right, of course.
Telcos have traditionally had four organizational components; the OSS/BSS/CIO piece, the CTO and standards piece, the operations piece, and the sales/marketing piece. If the first is changing as dramatically as it seems to be, can we expect similar changes in the other three, driven by the same forces? My chats with operators suggest we can.
I’ve chatted with 88 operators since spring of 2023, and of that group, 37 have indicated a greater CTO focus on service areas not related to traditional telco services, but only 11 said that there was a similar shift in operations and sales/marketing. From this, we could assume that telcos are looking at technologies that could expand their scope of services beyond current limits, but most haven’t yet satisfied themselves of the business case. CTO experimentation, in the form of lab trials, generally have to run a while to set the cost side of the equation, and market exploration has to do the same for the revenue side. The limited impact cited on sales/marketing suggests that the latter activity is lagging.
That’s probably not surprising either. Telcos have long had a supply-side, “Field of Dreams”, approach to new services, so trying to assess a market opportunity or develop one is a strange country for them. In fact, of the 88 operators overall, only 9 said they had a handle on market research and targeting in house. Another 29 said they were using external resources to gather information. If that’s true, then it could mean that there is more new-service thinking going on than even new-infrastructure thinking, but even if there is, it doesn’t seem to have percolated through to internal sales/marketing activity enough to change the focus of that organization.
The decade-old debate on the fate of OSS/BSS will be decided, I think, with the answer settling on both options. OSS/BSS has already been modernizing to the extent that it could be done without spending a lot of money. The aims of the TM Forum won’t be fulfilled; there will be no major changes in the architecture or adoption of a new set of APIs, for the simple reason that there’s no business case for either. But new services, if any exist, will drive a more cloud-like, almost-retail-sales-looking approach that, if any use is made of OSS/BSS, will generate some simple billing transactions at the end. They’ll come with their own management system, pure and simple.
OSS/BSS today is a shadow of what it was; more and more of the regular, daily, craft-management functions have fled the OSS/BSS into the NMS. We can expect that to continue, and it may be that 6G will accelerate it by the convergence of wireline, wireless, and satellite. Core billing is essential; everything else in OSS/BSS is really more easily handled out of the infrastructure-management dimension of NMS, and what’s then created is a service management system (SMS) that subsumes everything.
Who benefits from this? That’s hard to say. There is no clear leader in this sort of distributed-forces evolution of OSS/BSS thinking. Could a cloud provider with telco aspirations end up winning? If I had to pick an outcome, that would be my choice.
