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February 2007
Volume 10 / Number 2

Lowering Operational Costs. . .
An Industry Movement

By Kelly Anderson, For The Record

The buzz today in the communications industry is definitely IP-based multimedia services. With IPTV taking the stage at most trade shows in the past year, and now being offered in markets nationally, I think it is fair to take a look at what kind of expense a communications provider can expect as IPTV is rolled out as a mainstream service.

According to a recent report by Yankee Group, the operational costs may just be the largest ongoing line item in the IPTV cost model. Yankee Group estimates the ongoing support costs may exceed $28/month for every subscriber. Add that to more than $60 in support costs for the first 30 days, and then an estimated $360 set-up cost, and it may be hard to see how this service will become profitable while remaining competitively priced to current cable services. User acceptance of the service is greatly dependent upon uniquely good service and products while getting a fair price that is comparable to what they currently see on their cable or satellite bills.

One of the key elements to maintaining support costs for the providers will be saving money wherever possible. This will include automated customer account maintenance and trouble ticketing, setting customer expectations and providing useable FAQs, and being proactive to potential issues in service that the customer may experience. This is a little talked about initiative — lowering operation costs seems to be a “back-end” issue in services. Finally, the industry is looking at issues that can mean a lot when talking about the P&L of new services.

A few industry organizations have dedicated considerable work to lowering expenses for their providers. One such organization is the TeleManagement Forum’s NGOSS initiative. This initiative is important in developing standards that give service providers a framework for developing, procuring, and deploying operational and business support systems and software. It is working to bring the best tools and standards to the industry to create peak operational efficiency. recently met with the TeleManagement Forum at TMF World to submit the IPDR specification for consideration in the NGOSS framework. After some preliminary reviews, it looks like we will begin the process for NGOSS integration and Prosspero™ certification of IPDR. We are excited about what the impact will be to the industry. I am a firm believer that when the industry comes together and works on issues that really matter to the bottom line, it furthers technology and gives overall better products to consumers. The certification of the IPDR-based solutions by the Prosspero initiative gives IPDR international recognition as an efficient carrier-grade technology.

There has been significant talk this year about capturing data and metrics produced by users in the home network. As service providers consistently monitor the network leading to the home and maintain appropriate bandwidth, the home network also needs the same monitoring to assure the customer is getting appropriate service and to determine any potential issues in the programming and performance.

Throughout 2006, worked on protocols and service specifications that enable operators to gather important data about the performance of each user. In addition, many of the changes that were introduced included making our streaming protocol capable of being bi-directional, which gives providers the capability of getting data from the home environment, and also to be able to respond back in an interactive fashion. This would allow applications such as voting and interactive performance checks.

As the industry moves toward consolidation of services, the need to make standards and “best practices” usable to an operator’s bottom line greatly increases. Addressing operational bulkiness and high cost is a necessity in today’s marketplace. The industry will work together as long as the work is relevant and measurable as far as the bottom line is concerned. The future of next generation services depends on making profitability a number one industry goal.

Kelly Anderson is President and COO of, a collaborative industry consortium focused on developing and driving the adoption of next generation service usage exchange standards worldwide.

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