By: Marc Price

Telecom has struggled to achieve digital transformation. Even though some progress has been made, operators face the unfortunate reality of stagnant revenue, stifled innovation, and an inability to capitalize on network investments intended to spur new 5G services. It is a pivotal moment, as telcos will soon determine if their aspirations align with utility models or with new business creation. As outlined in A Value Machine for Modern Times, growth companies must align business systems with value generation, rather than perpetuating legacy constructs designed for obsolete services. 

With so much invested in legacy technology and business processes, how to efficiently achieve transformation has been elusive. This article focuses not just on the need, but also how it can be done.

Telco origins

The network was born as hardware and business support systems (BSS) as software. Network protocols differed from those used by IT teams, and hardware design also differed widely due to divergent requirements. Always-on, resilient, low-latency networks contrasted with batch-based, bill-cycle oriented processing systems and call center functions isolated from the service itself. 

The introduction of prepaid services in telecom proved a turning point. Unlike other business support systems, prepaid business logic impacted the service by determining if a customer had enough money remaining to begin a call or continue a call mid-session. These functions required network-grade reliability, speed, and performance. They were engineered in isolation from other legacy BSS, initially as “prepaid servers” and then eventually with the birth of the Online Charging System (OCS).

With the rise of data (and video) as the dominant telco service, the OCS remained a network function, isolated from other BSS—even when managed by the IT team.

A shift toward digital has telcos embracing the use of real-time charging for more than prepaid services. Factors including a more urgent need for digital services during the pandemic and the emergence of over-the-top services such as Netflix have spurred the need to coordinate seamless real-time charging and engagement at the moment of service.

However, separate calculations of real-time and end-of-cycle charges have prevented operators from representing a true cost to customers at the moment of service, as discounts, taxes, and aggregated charges are not calculated until later. Meanwhile, despite being inherently real-time, customer care is managed by back-office systems without timely access to in-service data, often leading to outdated or limited information for the customer. 

As a result, the telecommunications industry finds itself with digital needs constrained by a legacy architecture. The industry is seeking to move beyond traditional divisions such as prepaid versus postpaid, or voice versus data services. 5G investments to spur new services have yet to bear fruit. A modern telco architecture is required, with new characteristics to support new business models. Fortunately, this need is recognized by key industry groups that are newly coordinating to create a blueprint and achieve its realization.

A digital dawn

With digital business process advancements in other industries and shifting demands from telco customers, there is more of a need for real-time monetization than ever before. Most telcos have yet to realize real business changes, but the seeds for transformation are being sown. Where once networks were hardware, now everything is software. While previously network and IT systems had their own protocols, now application integration is aligning on common protocols and standards. And while