Amdocs Analyst Day: Can Amdocs Assist Operators in Meeting a SIMmering Challenge to Their Business Models? – Part One

Ron Westfall

Ron Westfall

Summary Bullets:

  • At the Amdocs Analyst Day the advent of software SIM technology, such as AppleSIM, which allows users to select service plans from their mobile devices and avoid physical swap outs of SIM cards proved a major theme. The new technology creates competitive and business model uncertainties for operators.
  • The Amdocs portfolio of products and solutions can prove well-suited for driving operator adaptability to the long-term competitive implications of software SIM technology.

Amdocs recently conducted its Analyst Day event, including its vision of key OSS/BSS-related market trends over the next few years. Amdocs addressed how potential disrupters could derail operators in capitalizing on emerging core trends such as adopting new modes of operator business and integrating catalog innovations. Amdocs identified software SIM and on-device innovations as a potential major disruptor to operators leveraging core trends to their competitive advantage.

With Apple introducing its AppleSIM technology, a software-controlled SIM card that enables owners to select networks from their device (i.e., iPad Air 2/iPad Mini 3), operators face a potential competitive threat that can challenge their business models. Should subscribers rapidly adopt software SIM technology, the ability of operators to control and manage the subscriber relationship could recede and shift over to device makers. The core challenge, then, for operators is how to adapt. Equally important is how Amdocs, a top-tier OSS/BSS solution supplier, can drive operator responses to this new wrinkle in the service enablement ecosystem and competitive landscape.

Apple already enlisted U.S. operators T-Mobile, Sprint and AT&T and UK operator EE to support the first iteration of its AppleSIM technology as part of the iPad Air 2 and iPad Mini 3 tablet launches. The participation of a handful of top-tier operators at the starting point of AppleSIM availability indicates some operator decision makers have prioritized understanding the implications of the new technology from the onset. In other words it will likely prove more beneficial to explore how support of software SIM technology can be leveraged to their competitive advantage rather than becoming forced to make defensive reactive moves to user uptake of a popular technology innovation. In the near-term, the move enables Apple to reduce the number of iPad iterations/SKUs needed to support the specific SIM requirements of each operator. The potential to choose from a variety of contract-free mobile data plans from select carriers with an onscreen purchase option caters to making the customer experience more intuitive.

As operators learn to adapt to software SIM innovation what are the areas Amdocs can drive to bolster operator competitiveness in meeting customer demand for software-enabled on-device service plan selectivity?:

  • <b>Analytics-Driven Plan Optimization:</b> Amdocs embeds the company’s big data analytics (BDA) assets throughout its CES portfolio including the Amdocs Proactive Care solution. The solution is designed to enable operators to dynamically apply policy and modify service plans according to the personalized and specific needs of customers. The solution logically extends to designing and modifying plans that target users with software SIM capabilities. This can include directing users to perceive the plan offered by the operator as better than competing plans.
  • <b>Operator Vertical Specialization:</b> The advent of software SIM technology could bolster the business case for operators to accelerate investment in addressing the specific networking requirements of verticals. For example, an operator that focuses on health care apps can use software SIM technology to incent users to select their network/service plans for all their health care communication needs. Amdocs, using its Digital Lifestyle Services portfolio assets, can guide operators in the due diligence required to invest in the verticals that align their network and brand with the specialized needs of different customer sets.
  • <b>Security and Reliability Differentiators:</b> The prime customer relationship could shift from the operator to the device maker. However there are practical limits to how far the device maker can own the customer relationship. Only the operator can resolve customer support for network-related issues. More importantly the operator already owns the network assets and mobile spectrum required to offer competitive service plans including prepaid, bring-your-own-device environments. One important way operators can bolster customer loyalty and hedge against device maker encroachment into the customer relationship is through renewed marketing emphasis on the security assurances and trust operators can deliver to customers. This includes upholding in-country legal mandates for personal data storage that a device manufacturer may prove hard-pressed to uphold consistently. Likewise operators offer secured cloud storage services that have avoided the security breaches that have plagued Apple iCloud services and various retailer networks (e.g., Target, Home Depot). Amdocs, with the application of its Network Optimization portfolio assets, can drive operators to use network security and cloud security assurances to help drive customer selection of their plans within no-contract selection scenarios.

It is clearly not too soon for operators to prepare to meet the challenge of software SIM technology. The technology can create more opportunity than disruption for operators that adapt to the ramifications of software SIM capabilities. It also generates a competitive opening for Amdocs to extend its OSS/BSS channel influence in driving operators to adapt their business models to accommodate the emerging competitive uncertainties linked to software SIMs.

About Ron Westfall
As the Research Director for Service Provider Infrastructure, Ron is responsible for tracking the evolution and key developments within the global service provider infrastructure and service enablement ecosystem markets, including back-office, infrastructure, regulatory, revenue management, and digital ecosystem issues.

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