Why Scalability in Software Architecture Matters in Telco BSS/OSS

Telco revenue can’t scale if its software doesn’t scale either.

When telco systems such as business support systems (BSS) or operations support systems (OSS) fail to keep up with peak periods, customers will bear the brunt of the issue. APIs will time out and its apps and website slow down, frustrating customers and causing them to leave.

Old software also slows down time-to-market for new capabilities due to layers of complex integrations while operations teams waste time patching bug after bug, affecting telco competitiveness.

Software scalability comes from multiple sources, such as its architecture, infrastructure, and processes. But before diving into how to make software scalable, it helps to unpack what is meant by scalable software and the challenges to getting it right.

What Does a “Scalable” Telco Stack Mean?

Scalable software refers to software that can keep up with workload variations and be efficiently upgraded with minimal downtime. Any upgrade to your system’s workload capacity, system updates, or launches of new products can be done quickly and seamlessly.

A telco software platform has two parts:

These stacks must cater to various usage scenarios such as:

Why Most Telcos Software Can’t Scale

Traditionally, communications service providers (CSPs) were more concerned with network stability than with scaling up their telco software. As a result, most new functionality was developed through bespoke solutions provided by many different vendors and bolted onto existing systems.

Software stacks from different vendors have different scalability characteristics like cost, latency, licensing, deployment models and more, which can make integration challenging.

Over the years, these factors led to massive, messy patchwork ‘spaghetti’ software that is tough to update, burdening CSPs with heavy technical debt. 

Any change needed expensive integration services and change requests between different software vendors. Meanwhile, swapping out one software suite for another vendor’s solution was even harder. Operators yearned for newer solutions but didn’t want to risk the downtime that a failed digital transformation could cause. 

Instead, many CSPs mostly use new solutions for new business lines like digital telco brands or IoT services where they can try out new software stacks without risking their existing brands. Once the new systems are proven to be reliable, they then move the core parts of their business to the new stack.¹

On top of technical debt, telcos are grappling with technical and organizational challenges to building scalable software.

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Technical challenges:

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Organizational Resistance to Change:

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The Cost of Software That Can’t Scale

Non-scalable software can affect even once dominant telcos. Failing to upgrade telco software can lead to declining Net Promoters Scores, poor customer experiences, declining subscriber numbers, and rising operating costs to maintain legacy systems.

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Solving Spaghetti-coded Software Issues with Telco SaaS

It’s understandable that telcos would like to test new software before migrating all their data to it. That is why many telcos choose to test software using new digital brands and mobile virtual network operators (MVNOs) first, so they can use the new software from scratch. Once they are assured that it is stable, they will roll out the software to the rest of their telco brands.⁷

This approach validates the full-stack clean slate approach. A full-stack clean slate approach migrates legacy software to a greenfield platform which frees the brand from brownfield or legacy software constraints.

Back in 2014, our team noticed that many telco software vendors couldn’t build and integrate telco software that could offer high quality digital-first customer experiences. There was a serious need for a platform that a digitally-native telco could use which was free from the brownfield spaghetti that telcos were trapped in.

On top of being customer-centric, this telco software stack needed to be both horizontally and vertically scalable.

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As Kannan Alagappan, Circles Chief Technology Officer puts it:

"One of the primary challenges we faced was how to provide telcos with the agility they need in a rapidly evolving market.

The telecom industry has long been dominated by rigid, legacy infrastructures that require multiple disparate systems that operate in silos, leading to a system that is complex, expensive, and slow to evolve. 

We wanted to take a fundamentally different approach: one that's cloud-native, API-driven, and built for agility. 

Unlike traditional telco stacks that rely on monolithic systems, we selected a microservices architecture that is modular and highly configurable. 

We designed our architecture from the ground up to be fully digital, leveraging SaaS principles to enable seamless scalability, rapid innovation, and deep integrations with partner ecosystems - enabling our operators to launch digital brands, deploy new services, and optimize customer experiences without the heavy operational overhead."

During our journey to build scalable telco software architecture, we built our architecture with:

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Modular and Configurable Microservices, Not Monolithic Architecture

Microservices lets CSPs upgrade their system without pausing the other functions, while allowing for greater configurability that can save their operations teams a lot of time.

Microservices split different functions into modules, which allows updates to each module separately without affecting the other modules. This gives it an edge over monolithic architecture where the whole system needs to be deactivated to make any update. This way, microservices architecture makes updates simpler, faster and less disruptive.

Designing the system to be configurable can free up operations team’s man-hours for more scalable activities. This level of configurability is achieved by designing system components so that product managers, marketing managers, and project leaders can configure them without relying on operational team support. The result is faster and more agile product and marketing launches to tap into market changes and higher ARPU.

Operations manpower can also be freed up by using pre-integrated telco software platforms. With everything pre-integrated, CSPs won’t need to coordinate with vendors for integrations nor fix bugs from messy integrations. This contributes to a lower total cost of ownership (TCO) compared to legacy, monolithic systems.

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Cloud-Native For Scalable Workload Capacity 

Cloud computing offers a lot of benefits to smaller telcos that struggle with insufficient server bandwidth. Older virtual network functions have been struggling to keep up with 5G’s technical demands, causing performance bottlenecks, scalability challenges, and high upfront costs.

By shifting more resources to private and public clouds, telcos can do away with heavy capital expenditure on upgrading these services and shift to on-demand network resources that the cloud can offer.

Cloud computing also allows for faster time-to-market for deploying services, on-demand network resources along with services like bandwidth scaling and VPNs, and less reliance on rigid hardware with the ability to offer tailored 5G services.

In April 2021, Vodafone Germany used a cloud-native dual-mode 5G Core to launch Europe’s first 5G standalone. Their solution used cloud computing to overcome the limitations of existing LTE (long-term evolution) infrastructure, enabling them to offer 5G capabilities like network slicing and ultra-low latency.⁸

On the other hand, telcos who already have powerful servers may not need the benefit from moving to the cloud. In that case, they can look out for deployment agnostic systems that can be deployed either on the cloud or on-premises.

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API-driven For Scalable and Diverse Service Offerings

Today’s digital world has no shortage of innovative digital services that telcos can partner with. Using an API-driven platform lets CSPs develop deep integrations with partner ecosystems and applications and rapidly onboard and launch their services onto their platform.

Kannan adds:

"One of the biggest hurdles is onboarding. Traditional telco partnerships involve lengthy integrations, complex contractual negotiations, and siloed systems that slow down go-to-market timelines. 

We worked on simplifying and automating the onboarding process through a flexible, API-driven framework—allowing telcos to integrate new partners in 5 minutes or less."

API-driven frameworks lets CSPs rapidly expand their list of partners and enrich their customers’ digital lives. 

KDDI in Japan provides one example of how far diversifying a telco’s service offerings can go. This leading Japanese telco currently offers digital streaming entertainment, books, shopping coupons and partner discounts as part of its Smart-Pass Premium digital loyalty program, but it isn’t stopping at just digital offerings.

KDDI acquired a 50% stake in Japanese convenience store business Lawson, making it a joint owner of the company. It plans on using Lawson’s 14,600 stores to add a physical element to its digital offerings. 

The Japanese CSP plans to integrate convenience store purchase and location data into their customer base to personalize shopping deals and optimize store operations, developing one of the largest customer data platforms in Japan. This is a great example of how telcos can diversify their ARPU.⁹

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Intelligent Automation and Real-time Data Analytics

Scalable architecture, on top of being able to handle more volume, should also be able to benefit from the latest technologies. Kannan shares a few strategic imperatives that are driving this evolution:

“Another challenge we looked to solve was enabling real-time data analytics across all aspects of telco operations. Traditionally, telcos have had to rely on legacy systems to process data in batch modes, which introduces latency and inefficiencies. 

AI-driven analytics and real-time data processing empowers telcos to make immediate, data-backed decisions, whether it’s optimizing network performance or personalizing customer experiences which is why we strive to include it on our own platform.

Another key advantage is automation. We build intelligent automation into our platform, allowing for real-time optimizations, predictive scaling, and seamless updates without service disruptions. This helps our partners operate with the latest innovations, ensuring their infrastructure remains competitive and adaptable to the future.”

In short, scalable software also benefits from the time savings that automation provides, and real-time optimization that real-time data analytics can provide.

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SaaS Advantage: Solutions Built from Global Feedback

If you are working with a telco SaaS provider, look for one with a scalable mindset towards customer support.

These partners will take requirements from their customers and from their internal teams to produce a roadmap of capabilities. This roadmap will then be prioritized based on the impact of the problem as well as how many customers are facing the issue. This allows your partner to build the most scalable solutions first and roll out updates that all our clients can benefit from.

These are just a few of the technical solutions that can help your telco software’s scalability.

However, there are still organizational challenges to overcome. 

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Scalable Thinking: Working on People and Processes

Telco transformation affects the whole organization, people and processes included.

But there are times when your organization will treat this like it’s just a ‘tech problem.’ Getting the organizational buy-in you need to upgrade to the latest software can sometimes feel like a one-man war.

But you don’t have to fight these battles all on your own. There are experienced software partners who also have experience running their own telcos who can help you.

Partners, such as Circles, have digital advisory support services (DASS) that involve presenting options, educating different telco stakeholders, and playing the role of business partner and coach for telcos. These cover the following areas:

From our experience running our telco brand Circles.Life and supporting our clients’ brands in different countries we know the journey and understand what works and what doesn’t first hand. 

Your staff will be equipped with training, processes and playbooks that have been built with tried and tested strategic and operational expertise, covering everything from digital marketing, CVM, NPS, partnerships, and business strategy.

Awais Malik, Circles’ Chief Growth Officer mentioned:

“Circles DASS transforms legacy mindsets into agile, customer-centric cultures. We leverage data-backed strategies, innovative toolkits and our cross market operational experience, to accelerate product launches, reduce churn, and drive new revenue streams.”

Our approach has enabled clients to achieve rapid subscriber growth and enhanced engagement, delivering measurable commercial impact across diverse markets.”

These services also feature a branding and marketing component. You can check out our research on Generation Z here and our campaigns here.

If your telco software can’t keep up with your growth goals, your customers will leave. Scalable software is what unlocks faster launches, better CX, lower costs, and agile expansion.

Scalable thinking helps your team maintain that momentum and innovate for the future. Our clients in Japan, Indonesia, the Middle East and beyond are racing towards the future.

Now it’s your turn, let’s talk.