By Tara Seals

The conversation around the significant industry-growth engines of operational transformation and mobile broadband ruled the day at B/OSS Live!, and so it’s perhaps ironic that a pair of mega-mergers in the $9.1 billion OSS/BSS space will streamline vendor positions in both of those areas. No. 1 infrastructure vendor Ericsson announced it would acquire OSS giant Telcordia, while billing behemoth Amdocs Ltd. said it plans to merge in independent policy vendor Bridgewater Systems.

“This is a significant consolidation of the OSS market that increasingly focuses on major integrated suppliers at the expense of independents,” says Larry Goldman, head of telecoms software research at Analysys Mason. It also points to the realities of next-generation B/OSS transformation, which is being driven by a much greater and more complex set of business model requirements in the face of personalized, mobile-enhanced consumption of content and apps, especially video. New charging models must emerge, and the sheer scope of what is required to enable a multi-screen, multi-network, multi-device service offering is almost staggering. No wonder consolidation makes sense. Now more than ever, as these transformations take place, the single throat to choke model is looking attractive.

In a move that would create an “Ericordia,” as B/OSS’ editor-in-chief wryly put it, Ericsson announced that it plans to acquire Telcordia for $1.15 billion in cash. Telcordia’s record for supporting multi-vendor OSS and its incumbency in the North American market are both big plums for Ericsson, which has been trying to deepen inroads to the market for a few years now.

“Ericsson’s existing OSS and business support system (BSS) products, global scale and strong services combined with Telcordia’s multi-vendor and service fulfillment strengths, will put Ericsson in a unique position as an end-to-end OSS/BSS supplier for new service deployment and OSS/BSS transformation,” said Goldman.

The idea of having such a large, fully integrated supplier changes the conversation around procurement for operators, which are facing increasingly dwindling options, but are looking for an efficient, optimized way to achieve OSS/BSS transformation. “This combination is a mixed blessing for communications service providers (CSPs),” says Goldman. “For those looking for a total solution provider, it makes Ericsson more attractive than ever as a supplier. For those looking for OSS solutions not tied to a major equipment or IT vendor, it eliminates one of the few independents left. It continues the trend of integrated telecoms and IT suppliers acquiring independent software vendors.”

Meanwhile, Amdocs is shoring up its capabilities in the complex, multi-device LTE charging realm with a $214 million bid for Bridgewater Systems. Bridgewater, which counts Bell Mobility, Clearwire, Comcast, Sprint, Telstra and Verizon Wireless as customers, offers a line of policy engines, network control platforms and home-subscription servers with real-time capabilities tailored to wireless. When mixed with Amdocs’ billing, rating and charging expertise, what emerges is the ability to support complex 4G business models that are based on dynamic data charging and take into account multiple devices, lines of business and networks, Amdocs said, which is a key to monetizing data services for service providers.

These two developments mirror exactly the conversations at B/OSS Live! Namely, that “next-generation OSS will consist of a tightly integrated set of subfunctions (such as assurance, fulfillment, policy management, catalogs and workforce management) that together allow operators to maintain and manage their networks effectively and efficiently,” according to visiongain Research. “These subsystems in turn are integrated with BSS functions, allowing operators to embrace the value discipline of customer intimacy, drive the business from a customer-centric perspective and map customer activity to revenues,” particularly when it comes to mobile broadband.

Thus, integrated players will have an advantage in this time of massive transformation, in a global OSS market estimated to be worth $13.7 billion by 2016. As such, it is unlikely that we’ve seen the last of the mega-mergers in this space.