2013 global stratecast csp billing - rating & charging market share leadership award

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Frost & Sullivan awards the 2013 Global Stratecast CSP Billing - Rating & Charging Market Share Leadership Award to Ericsson, with a 19 percent share of this market.

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2013 global stratecast csp billing - rating & charging market share leadership award

  1. 1. 2013 2013 Global Stratecast CSP Billing - Rating & Charging Market Share Leadership Award
  2. 2. BEST PRACTICES RESEARCH Market Share Leadership Award Stratecast CSP Billing – Rating & Charging Global, 2013 Frost & Sullivan’s Global Research Platform Frost & Sullivan is in its 50th year in business with a global research organization of 1,800 analysts and consultants who monitor more than 300 industries and 250,000 companies. The company’s research philosophy originates with the CEO’s 360-Degree Perspective™, which serves as the foundation of its TEAM Research™ methodology. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation and leadership. Based on the findings of this Best Practices research, Frost & Sullivan is proud to present the 2013 Stratecast Global Market Share Leadership Award in CSP Billing for the Rating & Charging Market to Ericsson. Significance of the Market Share Leadership Award Key Industry Challenges Addressed by Inc reased Market Share The Stratecast business support solutions (BSS) and competitive strategies team has taken a deep dive into the changing communications marketplace, and evaluated the role of billing and policy management within the communications service provider (CSP) BSS operations. We conduct this in-depth analysis of the end-to-end billing supplier market every two years. The Stratecast report series provides a five-year revenue forecast and a base year market share analysis for the end-to-end billing market, expressed in US dollars. It covers the period from 2013 – 2017, utilizing a base year of 2012. In an upcoming report, Stratecast hones in on the rating & charging and the other core billing segments, both individually and in combination, as these two segments are tightly linked. Stratecast research confirms that Rating & charging is the largest segment of end-to-end CSP billing sector and will account for over 47 percent of the overall billing market in 2013. The projected 2013 rating 7 charging market is approximately U.S. $5.24 billion, expanding at a 5.7 percent compound annual growth rate (CAGR) to U.S. $6.31 billion by 2017. Ericsson leads in market share for the rating & charging sectors by a significant margin. Stratecast believes that Ericsson controls over 19 percent of the rating & charging market and that the next four competitors account for 15 percent, 12 percent, 9 percent, and 7 percent of the market, in descending order. In addition, Ericsson is among the leaders in all six of the end-to-end billing market sectors. © Stratecast | Frost & Sullivan, 2013 1 “We Accelerate Growth”
  3. 3. BEST PRACTICES RESEARCH For the 2013 edition of our billing report series, Stratecast interviewed more than 100 billing suppliers that address one or more of the above mentioned market segments—that total includes more than 80 that supply Rating & Charging, other core billing, or combined solutions. Stratecast revenue estimates include vendors with software solution offerings that obtain revenues from license fees, maintenance fees, services associated with the initial installation and configuration of a solution, service bureau fees, cloud services fees, and installed solutions managed by a supplier. Internal CSP spending on business support and billing processes that are attributed to internal work teams or assistance from professional services consulting resources is not included. In addition, hardware-related revenue and revenue generated by systems integrators or companies without their own billing solutions is not included. The professional services fees for integration of new solutions with existing systems and updates to CSP business processes are also not included in the forecast. All revenue forecasts are developed by analyzing multiple sources including information supplied to Stratecast through a direct market questionnaire, information from public sources, direct interviews, and raw market data. The analysis was developed from 2012 company-level revenues, projections of future earnings, global financial market insights, as available, and our strategic acumen concerning the billing functions. To obtain estimated revenues for this five-year market forecast, Stratecast used a modified Delphi method for revenue analysis. Factors such as known deployments, publicly and privately reported revenue, customers served, press releases, financial reports, estimated cost of deployments, and related information were analyzed by a multiperson analyst team, each working independently, to estimate each vendor’s 2012 revenues, where such was not specifically provided. Final estimates were iterated to reach a consensus using a 90 percent confidence interval. From the base year level, the fiveyear forecast was established using insights about specific company directions, events, customer comments, general business insight, global economic indicators, and our strategic insight concerning each billing sub-sector. Best Practice Award Analysis for Ericsson The Stratecast Global Market Share Leadership Award in CSP Billing for the Rating & Charging Market is presented to the company that has demonstrated excellence in capturing the highest market share within the key global CSP billing market segment of Rating & Charging. The Award recognizes the company's leadership position within the industry in terms of revenue. Ericsson’ Performance in Global CSP Billing – Rating & Charging Ericsson is a provider of communications infrastructure, services and multimedia solutions, based in Stockholm, Sweden. It is traded publicly on the Stockholm Stock Exchange and on the NASDAQ under the symbol of ERIC. The company employs over 110,000 people © Stratecast | Frost & Sullivan, 2013 2 “We Accelerate Growth”
  4. 4. BEST PRACTICES RESEARCH worldwide. Ericsson reported 2012 revenue of approximately 227 billion SEK (U.S. $33.8 billion.) The company traces its origins to 1876, and today continues to offer its network equipment, services, and software solutions to service providers around the world. The company’s features two billing solution integrated suites—which themselves can be combined—that cover all segments of billing and policy management: Ericsson Charging and Billing in One – Incorporates functionality from the Ericsson Charging System and Ericsson Billing solutions into an end-to-end suite to offer full billing convergence. It is a single solution for all subscribers and services, both retail and wholesale, covering customer, product and order management, discount and promotion handling, balance management, billing, finance, partner settlement and real-time rating. Ericsson Integrated Policy and Charging – Brings together the Online Charging System (OSC) (either the Ericsson Charging System or Ericsson Mobile Broadband Charging) with the PCRF (Ericsson Service Aware Policy Control (SAPC)). Each of these integrated suites are built around the company’s Rating & Charging offers: the Ericsson Charging System and Ericsson Mobile Broadband Charging. The Ericsson Charging System enables real-time Rating & Charging and balance management for all services, all users, and any type of CSP. Ericsson Mobile Broadband Charging is an online charging system that provides prepaid charging for data, content, messaging, voice, multimedia, and VoIP. Ericsson Global Rating & Charging Market Share Within the global CSP rating & charging market, Stratecast identified an approximate 19 percent market share for Ericsson based on analysis of 2012 revenue. In support of this, it was observed that Ericsson has grown its market share, at an approximate five percent CAGR from 2009 through 2012. The top five suppliers within the rating & charging sector account for over 62 percent of the market, with Ericsson leading at a 19 percent share, followed by other suppliers at 15 percent, 12 percent, 9 percent, and 7 percent respectively. These competitors have CAGRs that range from a negative three percent to positive eight percent. Ericsson continues to lead the rating & charging market due to the number of customers it supports and the level of revenue it collects from the aggregate total of those customers. Ericsson’ CAGR is above all but one of its competitors and in terms of total revenue collected, Ericsson remains the market leader within the CSP Rating & Charging marketplace by a significant margin. © Stratecast | Frost & Sullivan, 2013 3 “We Accelerate Growth”
  5. 5. BEST PRACTICES RESEARCH Key Performance Drivers for Ericsson Factor 1: Strength of Billing Product Line – Market-Proven End-to-End Offering Ericsson offers an integrated portfolio of CSP billing and policy solutions. This includes solutions that fulfill the needs of all segments of end-to-end billing as defined by Stratecast to include mediation, rating & charging and other core billing, policy management, interconnect & settlements and content partner management. This is increasingly important in the CSP billing marketplace, as 100 percent of survey respondents viewed best-of-suite (all billing functionality from a single supplier) solutions as essential or important. Ericsson’ offerings are market proven as evidenced by its revenue leadership of the largest segment of CSP billing—rating & charging—as well as ranking second in revenue for the overall billing market, and ranking among the revenue leaders in all six end-to-end billing segments. Factor 2: Expansion of Billing Product Line Organically and Via Key Acquisitions Ericsson offers an end-to-end, integrated portfolio of CSP billing functionality which includes mediation, rating & charging, billing, settlements, partner management and integrated policy control. Ericsson’s solutions came about via a blend of organic growth within Ericsson, leveraging its knowledge of the current and future needs of its CSP customers, and via acquisition. In particular, much of Ericsson’s current strength in core billing came from its acquisition of LHS; while it’s online charging capabilities and policy management strengths came both from organic growth, as well as its acquisition of Telcordia. Ericsson is a very significant player in the end-to-end billing solution domain as shown by its revenue leadership of the largest segment of CSP billing—rating & charging—as well as ranking second in revenue in the overall billing market and ranking among the revenue leaders in all six end-to-end billing segments. Factor 3: Strength of Professional Services Organization Professional services are of key importance in the telecom arena, both for CSP customers and for their suppliers. For CSPs, professional services provide expertise relative to the installation, integration and operation of the complex hardware and software solutions required by the industry to deliver communications solutions to both enterprise customers and consumers. For suppliers such as Ericsson, professional services deliver a significant source of revenue and perhaps even more importantly, providing these services gives the company deep insight into what works, what does not, and the direction CSPs and the markets must go next to maintain customer satisfaction. For CSP billing, Ericsson has leveraged the knowledge and insight gained from its professional services organization into a strong end-to-end billing offering that has been market-proven by its revenue leadership position in the rating & charging segment and its © Stratecast | Frost & Sullivan, 2013 4 “We Accelerate Growth”
  6. 6. BEST PRACTICES RESEARCH ranking of second in revenue in the end-to-end billing market. Factor 4: Market Acceptance of its Network Equipment Offerings CSPs offer telecommunications services to billions of consumers and millions of businesses worldwide. The networks that enable these services are built around specialized network equipment; from switches to routers to radio access. Network Equipment Manufacturers (NEMs) provide the equipment to the CSPs and therefore have great insight into the CSP’s network and into their business. Success in network equipment offers them deep insight into the operation of the networks to be billed and an established relationship to build upon. In addition, it provides the ability to bundle solutions; i.e. buy this set of equipment and get this billing solution at a better price. Stratecast has observed that the days of providing CSPs with “free BSS solutions” or substantially discounted solutions when they purchased substantial amounts of network equipment from a single supplier, are over. CSPs almost exclusively now operate multi-vendor networks and thus equipment manufacturers can not simply include such complex software capabilities in the overall equipment purchase price. BSS and OSS solutions are totally stand alone business units, with accountable profitability quotas, at Ericsson and all of the other NEMS supporting the communications marketplace. Ericsson’s success in the overall billing market is directly tied to its success in the network equipment market. The company had 2012 revenue of over U.S. $33 billion, of which a significant portion is tied to network equipment sales, making it one of the world’s largest NEMs. Conclusion Stratecast has taken a deep dive into the changing communications marketplace, and evaluated the role of billing and policy management within the communications service provider business support system operations. We have interviewed and analyzed over 100 suppliers, covering various aspects of the end-to-end CSP billing marketplace. Rating & charging is the largest segment of CSP billing and will account for over 47 percent of the overall billing market in 2013. The projected 2013 market is approximately U.S. $5.24 billion, expanding at a 5.7 percent compound annual growth rate to U.S. $6.31 billion by 2017. Ericsson leads in market share for the base year of 2012 for the Rating & Charging sectors by a significant margin. Stratecast believes that Ericsson controls over 19 percent of the Rating & Charging market and that the next four competitors account for 15 percent, 12 percent, 9 percent, and 7 percent of the market, in descending order. In addition, Ericsson is among the leaders in all six of the end-to-end billing sectors. Stratecast awards the 2013 Stratecast Global Market Share Leadership Award in CSP Billing for the Rating & Charging Market to Ericsson, with a 19 percent share © Stratecast | Frost & Sullivan, 2013 5 “We Accelerate Growth”
  7. 7. BEST PRACTICES RESEARCH of this market. Critical Importance of TEAM Research Frost & Sullivan’s TEAM Research methodology, as summarized by Chart 3 below, represents the analytical rigor of our research process. It offers a 360-degree view of industry challenges, trends, and issues by integrating all seven of Frost & Sullivan's research methodologies. Our experience has shown over the years that companies too often make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Frost & Sullivan contends that successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. In that vein, the letters T, E, A and M reflect our core technical, economic, applied (financial and best practices) and market analyses. The integration of these research disciplines into the TEAM Research methodology provides an evaluation platform for benchmarking industry players and for creating high-potential growth strategies for our clients. C ha r t 1 : B e nc h ma r ki ng P e rf or ma nc e w i t h TE A M R es ea rc h About Stratecast Stratecast collaborates with our clients to reach smart business decisions in the rapidly evolving and hyper-competitive Information and Communications Technology markets. Leveraging a mix of action-oriented subscription research and customized consulting engagements, Stratecast delivers knowledge and perspective that is only attainable through years of real-world experience in an industry where customers are collaborators; today’s partners are tomorrow’s competitors; and agility and innovation are essential elements for success. Contact your Stratecast Account Executive to engage our experience to assist you in attaining your growth objectives. © Stratecast | Frost & Sullivan, 2013 6 “We Accelerate Growth”
  8. 8. BEST PRACTICES RESEARCH About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com. © Stratecast | Frost & Sullivan, 2013 7 “We Accelerate Growth”

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