According to a recent quote in the well-respected Indian financial newspaper, Economic Times: in a technological world products and ideas can be easily duplicated, however, a coherent and rewarding customer experience cannot.

“If all operators can offer broadband, mobile, voice and data services, what else can they differentiate themselves on? It is customer experience. This is not a ‘soft’ issue, but a matter of profitability and competitive differentiation,” says Debra Osswald, director of the telecoms industry at Amdocs.

The issue drives to the heart of convergent billing. First and foremost operators – fixed and wireless – are looking to reduce the costs of operating and maintaining the multiple billing systems that they have built up over a number of years. But there is a growing realisation that converged, real-time billing systems could also impact the bottom line, by improving the customer experience and, in turn, driving consumption and reducing customer churn.

“Every operator in the world is looking at converged billing for a number of reasons, the primary of which is cost. Billing costs operators large amounts of money as they have acquired or built multiple systems for specific products and services – it’s not unusual in the older operators to find more than 20 – which can be very costly and difficult to maintain and operate,” explains Andrew Rodaway, director of marketing and communications at BSS/OSS specialist Intec Telecom Systems.

At the same time, customers are demanding access to the latest multimedia content, which requires not only seamless delivery, but also an element of real-time dialogue regarding how much the service that is about to be consumed will cost and, from the operators’ point of view, how the consumer is going to pay for it.

Typically, billing was a ‘post-event’ capability but newer, high-value services need real-time dialogue – including capabilities such as cost information, credit card authorization and security– in order to provide seamless, sub-second response times.

But while today’s convergent billing systems have largely overcome the technical challenges, the process of consolidating multiple systems – for example, pre-paid charging platforms and post-paid billing systems – onto a single, converged billing platform, is challenging, time-consuming and costly.

For new entrants into the market, the option of building a converged billing system from scratch is a ‘no-brainer’. However, for established and incumbent carriers, which have invested large amounts of money in legacy systems over many years, the way forward is much more complex.

“Moving away from this very convoluted billing infrastructure is very important for operators and they’re pushing hard to do so. But it’s a substantial challenge for them to integrate systems with new technologies, which contain a vast amount of customer data,” explains Rodaway.

As a result, operators are taking it a “slice at a time”, he says, with progress varying greatly between operators and throughout geographical regions.

“There are genuine converged carriers today, but they probably make up less than five per cent. For most telcos, the ‘big bang’ approach is way too risky – and involving lengthy programs – so they’re taking a slow but safe approach,” says Rodaway.

He argues that smaller operators with three or four systems – such as Intec customers, Polkomtel ( Poland’s second largest) and Telecom New Zealand – can make the case more easily, especially from a competitive stance. However, he points out, it is still a massive project.

In the UK, Intec cites two major reference customers: Virgin Mobile and Hutchison 3 – the former having used Intec’s convergent billing system since its inception.

Danny Dicks, principal analyst at telecoms industry research provider Analysys agrees: “For most operators converged billing is still a work in progress. But we’re seeing a growing number of contract announcements for single converged billing systems. As operators add more services, they can’t continue to just keep adding billing systems.”

Dicks points out recent announcements from Amdocs (Simobil in Slovenia), LHS (StarHub in Singapore) and Highdeal (Maroc Connect in Morocco).

Reducing cost and complexity, and having the ability to provide and charge for real-time, high-value services is now an imperative for operators, but the issue that is increasingly justifying the business case for operators to switch to a converged billing platform is that of customer care, which in an increasingly competitive environment is becoming critical.

“Another major challenge facing the operators is that of customer care and relationship management, with customers often left playing ‘phone tag’ between departments. The ideal is to deal with every problem in a single instance, which decreases customer churn by improving satisfaction,” says Intec’s Rodaway.

Amdocs has also adopted a ‘customer-centric’ approach to convergent, real-time billing, with customers such as Canadian fixed and wireless operator Rogers and Australia’s Telstra embracing the company’s ‘integrated customer management’ approach.

“Our solutions provide our customers with a 360-degree of customers, so that they understand the value of a customer and so can enhance their experience at any touchpoint. It also means that our customers have the agility to create new offers and services and bring them to market quickly, and gives them the flexibility to change pricing and discounts, and so on, at any time,” explains Amdocs’ Osswald.

However, she points out that this approach does not require operators to throw out legacy systems. Instead, Amdocs uses a customer information platform or ‘hub’, which draws data from multiple systems into a single interface that hides the logic and complexity beneath.

“It gives almost unlimited flexibility in terms of creating and bundling new services across lines of business, and the greater data integration can be used to drive the business,” says Osswald.

Cable firm NTL, which rebranded as Virgin Media in February 2007, has also recognized the power of using convergent billing as a platform for improved customer care, and is set to replace four architecturally different legacy systems with Convergys’ ICOMS converged billing system later this year.

Following well-publicised customer care problems at NTL, the timing of the company’s ‘rebirth’ and decision to consolidate its billing platforms was no coincidence.Once installed, the customer care and billing infrastructure will support over five million video, telephony and broadband customers.

“The challenge is providing a coherent customer experience across all these channels, which can be done through the convergence of different billing assets,” explains Alistair Hanlon, product strategy manager at Convergys.

He continues: “For example, if a customer’s bill is 20 per cent higher than usual one month, the system could alert an agent to make a call or could send an SMS explaining to the customer why the bill is higher – it might be the end of a discount period or the purchase of a new service. Or an operator might choose to offer different levels of care according to the value of the customer.”

At the same time, the consolidation of data onto a single platform improves the accuracy of information, not just on customers but also on products, services, discounts, and so on. “The system provides accuracy of information, and a single point for information and providing a coherent customer experience, as all the information on the billing side correlates with that on the customer side. Coherence of data is a huge issue when moving to converged billing,” says Fiona Fulton, market strategy manager at Convergys.

Like Amdocs, Convergys places an emphasis on ‘wrapping’ existing legacy systems together through a single hub, rather than ripping out old systems and replacing them with new, which makes the ‘converged billing’ decision for operators that much easier.

As the range of services offered by operators becomes broader and the services themselves more complex, Convergys’ Hanlon believes that there will be an increasing move towards overlaying applications across existing architectures and platforms.

“Operators are sick of large four-year IT projects and talk of replacing legacy systems, so we’ll increasingly see them overlaying business policies across existing silos to ensure that business policies – such as customer care, discounts, and so on – are applied evenly across services,” he says.

Fulton agrees and adds that operators are also looking beyond customer care and broaching other issues such as the coherent activation of services and third-party revenue management and sharing.

“Previously, third party management operated manually or on an ad hoc basis, which resulted in massive revenue leakage – I’ve seen some clients trying to do it using an Excel spreadsheet. But as services are offered by a growing number of providers, this will become a business-critical issue,” she says.

As the range of services on offer grows, so there are more content providers in the value chain, and customers are expecting even more for less. In such a competitive environment, the ability to offer a coherent and rewarding customer experience will become the de facto differentiator, and convergent billing looks set to be sat at the core for some years to come.