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This article was written by Varun Arora, Carlos Oliver Mosquera, Nathan Bell, Gagan Gakhar and Suryadipta Dey. The original article was published by Kearney. You can find the article here.
Telco business support systems (BSS) have evolved into highly complex and fragmented ecosystems over decades. Initially designed for simple billing and subscriber management, today’s BSS must support real-time charging, multichannel customer interactions, partner ecosystems, and 5G monetization, while ensuring regulatory compliance and operational efficiency at an optimized TCO. The core reason for this complexity lies in the telco industry’s rapid evolution, where legacy systems struggle to keep up with shifting customer expectations, changing business models, and the need for agility.
When a leading operator invests heavily in 5G, expecting to unlock new revenue streams, they realize that its decade-old BSS cannot support dynamic pricing, usage-based billing, or network slicing. This forces the operator to rely on static, one-size-fits-all plans, while digital competitors roll out tailored, high-margin enterprise offerings. Another telco is eager to launch a digital-first sub-brand. It finds that even a simple plan change requires months of coding and vendor negotiations. Meanwhile, a cloud-native MVNO can spin up new services in days. In the B2B segment, a promising enterprise deal collapses when the telco fails to integrate its billing system with a hyperscaler’s platform, leaving millions in potential revenue on the table. Digital-native users demand seamless, real-time experiences, but legacy BSS architectures, built for a batch-processing era, struggle to deliver instant activations and self-service capabilities, leading to customer churn spikes. In a landscape where speed and adaptability define success, legacy BSS is not just a technical debt, it’s a strategic liability.
Telcos now face a critical inflection point, driven by three forces: rapidly evolving customer demands, the push beyond traditional connectivity into digital services, and the need for operational agility at scale. Cloud-native BSS platforms are emerging as the key to this transformation, offering the flexibility, speed, and scalability required to compete in a digital-first world.
In the rapidly evolving telecommunication landscape, telcos are experiencing dramatic changes, revealing various new opportunities:
Legacy BSS suffer from accumulated technological and process debts, resulting in complex, rigid architectures that are costly to maintain, taking up to 70 percent of IT budget at times which results in limited investments into growth and transformation. These outdated systems lack the flexibility and real-time capabilities required for modern billing, service orchestration, and data management, limiting operators’ ability to fully leverage new opportunities.
Modern BSS platforms are no longer mere technology upgrades—they will be an essential growth engine, facilitating not only top-line growth and bottom-line improvements but enterprise-wide business transformation (see figure 1).
Telcos that have modernized their BSS have achieved significant gains by unlocking agility, reducing costs, and enhancing customer experiences. For instance, operators leveraging real-time data processing and AI-driven personalization have seen NPS scores rise by 20+ points, as customers experience consistent omnichannel experience, seamless buy and servicing journeys, and proactive issue resolution—whether they’re switching plans via an app or seeking assistance at a retail store. On the cost front, telcos have reduced TCO by 20 to 30 percent by eliminating expensive legacy maintenance, cutting middleware complexity with open APIs, and shifting to cloud-based infrastructure that scales on demand. Meanwhile, time-to-market for new products has improved by up to 90 percent, with modular, microservices-based architectures allowing operators to launch new 5G plans, digital services, or OTT bundles in days instead of months.
As the telecommunications industry evolves, the BSS platform landscape grows to mirror the market needs. Five key capabilities are emerging as priorities for next-generation BSS platforms:
1. Open ecosystem and API platform. An open ecosystem is crucial for telcos aiming to expand their service portfolios and collaborate with innovators in sectors such as fintech, IoT, and digital content. For instance, T-Mobile has successfully utilized its API platform to launch integrated services that enhance customer engagement and drive incremental revenue.
2. AI and automation. Incorporating AI revolutionizes operations by enabling a dynamic product development process, from AI-powered product design and agentic automation to dynamic pricing. These capabilities can significantly reduce time-to-market from months to mere days.
3. Microservices and containerization. This design allows operators to update individual components without risking system-wide disruptions—a crucial advantage during high-demand periods.
4. Scalability and resilience. This capability is essential in a market characterized by volatile demand spikes, such as during major sports events or unexpected surges in remote work. Telcos leveraging these platforms can dynamically allocate resources to maintain service quality, thereby reducing the risk of outages and preserving customer trust. During the COVID-19 pandemic, operators that had migrated to cloud-native architectures maintained robust performance despite unprecedented load increases.
5. Low-code/no-code development. This approach enables rapid adaptations to market demands, reduces development time, and ensures a faster time-to-market.
Telcos are increasingly kickstarting BSS transformation for agility driven by digitalization and cloud-native architectures (see figure 2).1
With this development, we see three key archetypes of BSS providers: full-suite BSS leaders, deeply integrated BSS/OSS providers, and cloud-first innovators.
We see emerging cloud-first BSS innovators pushing the boundaries with their rapid agility, scalability, and simplicity, carving out real opportunities to innovate and drive change. However, they often fall short of fully replacing full-suite leaders’ modernized, yet time-tested stacks. There are four key considerations for telcos in evaluating BSS providers (see figure 3).
Full-suite leaders typically offer complex rating and charging engines, refined over decades to handle multi-tiered, real-time converged charging such as from intricate tariff structures and bundled discounts, roaming complexities for both B2C and B2B telco businesses, and more. Their proposition may include separate modules such as service order management (SOM), customer order management (COM), CRM, and billing systems. In contrast, many emerging cloud-first innovators offer simpler, less flexible models, often focusing on B2C telco businesses. Cloud-first solutions are usually integrated end-to-end rather than modularized but come with greater agility and innovation to support various beyond-core telco services. Additionally, full-suite platforms feature mature revenue assurance and fraud management modules, capabilities that many cloud-first innovators are still developing.
Deeply integrated platforms and full-suite BSS leaders provide robust, integrated systems with extensive battle-tested integration with a myriad of legacy OSS, ERP, and CRM systems, enabling seamless operations across a telco’s full spectrum of services. This level of interoperability is often unmatched by newer platforms out of the box. Newer platforms, by contrast, are built on modern, microservices-based architectures, designed to support greater configurability and vendor-agnostic structures, enabling seamless integration with other cloud services, making them well-suited for next-generation business models.
Full-suite leaders have a proven track record of serving as end-to-end enablement partners with extensive professional services from consulting service and implementation to managed support services and more. On the other hand, emerging cloud-first innovators are positioning themselves as strategic partners, differentiating through services that go beyond BSS platforms such as supporting telcos in establishing and operating sub-brand for their digital-first services, from product design to marketing and pricing. This can enable traditional telcos to adopt new operating models and accelerate their journey to become digital natives.
Full-suite BSS solutions can have significant upfront investments in infrastructure and ongoing maintenance costs and may require customization requests to achieve high configurability. However, full-suite leaders typically provide long-term support and predictable pricing models, such as license-based fees, customization-driven charges, long-term contracts, and more. In contrast, cloud-first innovators can operate different forms of commercial structures, such as subscription-based models, revenue-sharing arrangements, and more, allowing for lower initial investments and more predictable operating expenses. Telcos must carefully evaluate the commercial implications of each option.
As telcos embark on this journey, we see three key paths forward.
1. Continue BSS transformation with full-suite leader. This can help to minimize business disruptions, especially for operators heavily reliant on existing intricate legacy system integrations.
2. Switch direction of transformation to cloud-first innovators as the sole BSS provider. This can accelerate telco’s BSS transformation, suited for operators prioritizing rapid deployment of digital services, flexibility, and scalability. This must be accompanied by business simplification.
3. Leverage cloud-first innovators for new digital segments and current full-suite BSS leaders for core. This approach balances advancements in next-generation business models with minimizing disruption to existing businesses relying on legacy systems, though it can introduce higher complexity from managing multiple BSS platforms.
In recent years, more than 50 telcos globally have trialed or adopted cloud-first BSS platforms.
The rapidly evolving telecommunications landscape means embracing cloud-native BSS platforms will be a critical question for telco operators as they aim to drive cost efficiency and business innovation. However, the path to modernization is not without its challenges. To fully capitalize on the benefits of cloud-native BSS, telcos must navigate a series of strategic choices, from synchronizing organization-wide technology and business objectives to adopting comprehensive cloud and partnership strategies.
Kearney has extensive experience in supporting leading telcos in their end-to-end BSS transformation journeys:
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