What a Bali Market Taught me about OSS and Business
Success in business, distilled to its simplest form, is often about arbitrage. The gap between supply and demand. The gap between value delivered and value
For decades, scale gave large telcos purchasing power, infrastructure reach, extensive capability and millions of customers. It became one of the world’s most powerful and durable business models. But scale and complexity has created thousands of dependencies across OSS, BSS, networks, processes, vendors and people.
Clay Christensen showed that disruption often begins with something that looks smaller, simpler and even inferior. Incumbents keep serving their best customers, protecting margins and improving the model that made them successful. But this opens the door to new entrants to attack overlooked opportunities from below.
The contrarian possibility is that the very machinery that made big telco so powerful may now prevent it from jumping to the next S-curve. In the AI era, advantage may shift to the smaller, less-entangled operator whose OSS gives it the freedom to change direction before ever-smaller windows of opportunities disappear.
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If today’s telco technology environment could be summarised in one word, it might be entanglement.
OSS are highly entangled with many layers of dependencies. BSS are too. And these tools are downstream of significant complexity in modern networks. Networks are entangled with products, processes, vendors, data models, organisational structures, network inventories, spares and more. Changes in one area create impacts across many others.
Over time, this entanglement has come to be accepted as the natural condition of running a large telco. Each new product, acquisition, network generation, regulatory requirement and transformation programme has added another layer. Even when old systems are retired, their processes, data structures and assumptions often remain embedded elsewhere. Every virtualisation, abstraction and integration simplifies on one hand, but adds to complexity / entanglement on the other.
You can guarantee that this complexity was not created carelessly. Much of it resulted from rational decisions intended to serve customers, increase reliability, meet regulatory obligations and protect revenues. The problem is that accumulated capability eventually becomes operational mass – the OSS inertia principle. In classical physics, force equals mass by acceleration. The greater the mass of the OSS, processes, bureaucracy and the organisation surrounding it, the more force is needed to achieve a change in direction.
Integrations behave like rubber bands connecting pieces on a chessboard. Move one piece and several others are pulled out of position. A seemingly minor product or process change can require impact assessments across directory services, shared services, fulfilment, inventory, assurance, billing, customer care, analytics and network operations.
This is why a small commercial idea can become a large transformation programme. It’s also why OSS has far more influence over telco strategy than is often acknowledged.
OSS doesn’t merely support the telco business model. It helps determine which business models are operationally possible.
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In Howard Yu’s reflections on the work of Clay Christensen, disruptive technology is described as something that is initially inferior, yet “cheaper, simpler, more accessible”.
Disruption doesn’t usually begin with a new entrant building a better version of everything the incumbents already provide. It begins at the fringes, serving customers or use cases that established operators overlook, can’t serve economically or don’t consider strategically important. There are literally hundreds of mid-sized telcos around the world that are underserved by the OSS and BSS market, as vendors chase the bigger-budget telcos instead.
Large organisations aren’t blind or badly managed. They’re usually doing what their customers, investors and operating models encourage them to do. They serve their most valuable customers, improve their premium products, protect margins and invest in capabilities that reinforce their existing advantages.
Christensen described the resulting imbalance as “asymmetric motivation”.
The challenger is highly motivated to pursue the small, low-margin or imperfect opportunity. The incumbent is not. Its cost base, processes, expectations and resource-allocation mechanisms make the opportunity unattractive.
This should feel familiar to telcos and OSS/BSS vendors alike.
A narrow customer segment or specialised service might represent an attractive starting market for a smaller operator or vendor. For a large telco, the same opportunity might not generate enough revenue to justify integration, product modelling, testing, operational readiness and support costs.
The incumbent might be technically capable of pursuing the opportunity, but operationally and economically incapable of responding in the same way. Or incapable of meeting a certain price-point of customer budgets.
This is how strengths become constraints. The large integrated telco remains formidable on the established S-curve, but its success makes the jump to a different curve harder to justify and harder to execute.
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AI is often presented as a way to make the existing telco factory faster and more efficient. It can automate workflows, accelerate root-cause analysis, assist operators, generate code, improve customer interactions and reduce manual effort.
Those are valuable applications, but they may only optimise the existing S-curve.
The more strategically important effect of AI could be its ability to make smaller markets, narrower offers and more specialised operating models commercially viable.
AI can reduce the cost of identifying a customer need, developing an offer, configuring supporting processes, producing content, assisting service teams and learning from operational feedback. Opportunities that once looked too small may become worth pursuing.
However, these opportunities may also remain available for less time.
When competitors can identify, build and test offers more quickly, advantages will be copied sooner. Customer expectations will move faster. Niche markets will be discovered earlier and may become crowded rapidly. (ie the opportunity window may shrink from years to months, or from months to weeks)
In this environment, a telco must be able to rapidly test an idea before embedding it permanently into dozens of systems (or embedding / adapting really quickly). To optimise the Whale Curve, it must be able to withdraw an unsuccessful offer or solution without impact. Before that, it must be able to identify which products are actually profitable once all costs are factored in.
AI may therefore increase the value of simplicity. It could give the less-entangled operator enough capability to compete, while giving the entangled incumbent more things it wants to change but can’t due to the Inertia Principle.
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The established telco was designed for scale, stability and repeatability. Its systems and processes evolved to deliver essential services reliably to millions of customers.
Those characteristics remain important. Adaptability does not mean abandoning resilience, regulatory obligations or operational discipline.
But stability and adaptability must be held in balance.
Many telcos now have strategies that move much faster than the machinery beneath them. An executive team can identify a new opportunity in days. Product and marketing teams can design an offer in weeks. Yet OSS and BSS (provisioning, assurance, billing, inventory and support) changes may take months or years.
The strategy has moved, but the operating stack can’t move fast enough to benefit from the opportunities identified.
This creates a dangerous illusion. The telco appears active because it has innovation programmes, AI initiatives, transformation portfolios and new architectural targets. However, if every initiative adds another platform, abstraction layer or integration, the organisation may be increasing its mass while describing itself as more agile. More entanglement makes it act more like a monolith.
The S-curve makes the timing problem even harder. The jump to a new model generally needs to begin while the old model is still successful enough to fund it.
Waiting until decline is undeniable means waiting until investment capacity, confidence and time are already disappearing. But moving earlier requires leaders to challenge the systems, incentives and operating assumptions that still appear to work.
The crucial question is therefore not whether the traditional telco model has failed. It hasn’t exactly, but I fear that the current telco business model is nearing the top of its S-curve as we await the next S-curve model to jump to..
The question is whether its operational machinery allows the organisation to explore and establish its next model before the current one reaches the end of its curve.
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As Christensen suggested, the next telco model may initially appear inferior by today’s measures.
It may have fewer products, basic networks, less infrastructure, narrower coverage, fewer system capabilities and less operational machinery in general. It may not meet every edge case. It may depend more heavily on partnerships or serve only selected customer groups.
But it may also have fewer dependencies, faster learning cycles and a much lower cost of change.
It may be able to pursue an opportunity that is too small for an incumbent, improve its offering while the market develops and move upwards as its capabilities mature. This is the disruption pattern Christensen described.
Its OSS is sure to be central to that advantage.
A smaller telco does not automatically have a simpler OSS, but generally does as described in the diagram below. Regardless of size, simplicity needs to be intentional.
There is another advantage that may become increasingly important: care.
In Tom Goodwin’s reflection on consulting and spreadsheet culture, he describes a world that has become faster, cheaper, more optimised and more abundant, while losing humanity, craft, pride and joy.
That observation applies to telco too.
Efficiency programmes can make internal measures look better while transferring friction to customers and frontline teams. Automation can remove cost while also removing discretion. Procurement can improve transaction prices while weakening relationships. Processes can meet their service levels while failing to solve the problem that actually matters.
As discussed in What a Bali Market Taught Me About OSS and Business, care, generosity and gratitude may represent an overlooked form of business arbitrage (for telcos and OSS/BSS vendors).
AI can amplify either side of this divide. Used with a transactional intent, it can extract more, reduce contact and make existing processes cheaper. Used with care, it can provide more context, better support, more accessible expertise and greater awareness of what customers and operational teams need.
This is where the smaller telco may gain an advantage that is difficult to capture in an optimisation spreadsheet. It may allow it to be closer to its customers, closer to its operations and more aware of the consequences of its decisions. Ideally, it will have enough flexibility to act on that awareness.
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Large telcos remain powerful. Their networks, brands, customer bases, expertise, asset bases and capital clearly can’t be dismissed. But the characteristics that made the model successful will not automatically make it adaptable in coming years.
Telcos now face a series of decisions.
The future may not belong to the operator with the most complete architecture, the largest transformation programme or the greatest number of AI use cases.
It almost certainly belongs to the telco that can see small windows of opportunity, make decisions and leverage the opportunity before that window closes.
In a market defined by increasingly accelerating change, the biggest competitive advantages will be less entanglement and more adaptability.
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