Debates about billing are perennial: only the details change. Priscilla Awde believes arguments centre on consolidation, real time access, content rating and support for business agility.

 

As the main repository of customer information, billing contains the crown jewels of any operation. Mining that data, making it available internally and to content partners and advertisers is a potentially lucrative golden seam.

Speed and flexibility are critical in markets where complexity is growing. Mobile operators with millions of pre/post customers, run separate wholesale and retail billing platforms handling billions of low value, multimedia applications and content from an increasing number of providers. Progressively shorter product lifecycles require faster launch/tear down times and budgets are getting tighter. Operators face competition from new entrants offering very accurate billing and high service levels.

Customers are more demanding, expecting similar real time web access to accounts and services as is available from new disruptive on-line suppliers. Operators may be cut out of the loop altogether if they do not restructure and move to customer centric platforms. “Customers can go direct to the web and download content to handsets so operators have no control and must change the way they think about markets,” believes Steve Lewis, lead consultant at Analysys-Mason.

Real time, convergent billing holds answers but consolidating databases and creating a single view of customers’ behaviour is a significant change for most operators which currently have a plethora of disconnected billing platforms. Legacy billing holds vast amounts of valuable customer data which is hard to access, not readily available to other business processes, often duplicated in disparate databases and rarely accurate.

Although legacy billing is inefficient, expensive to run and maintain, it does work and operators are reluctant to disrupt the status quo especially if doing so involves expenditure or may affect the bottom line. Costs are rising though and instead of supporting speed and agility, legacy platforms hinder both thereby directly and negatively impacting operators’ ability to compete.

If operators do not consolidate and invest in billing it will cost them in the long run and not only financially. They risk missing opportunities to deliver multimedia web based services; the self provisioning customers want; will be slower to market and eventually fall behind other suppliers. “New entrants are moving very fast into a new service network based on a different business model. It is a new world of services – very difficult to handle with legacy systems,” says Michel Burger, principal architect, online services at Microsoft. New cloud computing uses networks as pipes and goes direct to consumers making creating services fast, cheap and successful.

Transformation is happening but it is not only technical transformation that is needed argues Giles Newcombe, senior director, alliances/market development at Convergys: “The biggest challenge for operators is a significant transformation in business attitude from delivering bits/bytes into thinking more in a retail mode. Telcos could be more powerful in the food chain but need to rethink the way they act as businesses and understand end users better.

“Billing has big front end value and its data can be used better since it interacts with lots of customer touch points, showing where and how people are buying. Operators’ largest power is tracking customers and knowing lots about them: they need to use that information to give value to content providers and advertisers.”

According to Gartner, by 2012 many of the largest carriers will offer new services minimally related to telecoms and in developed countries will derive at least 15% of revenue from non-traditional sources.

Transparency is as essential as limiting credit risk and revenues lost from discrepancies between services ordered, delivered, billed and monies collected. Neither pre nor post paid customers want surprises: they want more control over spending and to purchase services and settle accounts on-line.

Operators are merging pre and post paid billing providing both customers with accurate account information. “Telecoms billing must move more towards the retail model in which people pay as they get products so everything is pre-paid,” believes Jaco F ourie, director, business and development strategy at Ericsson. “Operators need to bring pre-paid real time charging capabilities into the post-paid environment giving customers real time notification of current balances. Giving post-paid customers the same controls and visibility of spend encourages more spend and increases operators’ credit control.”

It is not only end users who want real time access to billing data, greater accuracy, management and control. Wholesale billing has been notoriously inaccurate especially for small content owners who must trust operators for what they are owed. The alternative is to use aggregators or reach customers via Google or Amazon who can accurately measure services used.

However, Birger Thorburn, CTO for billing at Comverse believes communications billing comparisons with Amazon are somewhat invidious: “Network engineering is very different and very legacy. Operators must combine massive transaction numbers and huge scale with sophisticated IT systems. It is common for medium sized operators to handle two billion micro-priced transactions monthly compared to far less than one billion at Amazon which started from scratch and has built very good infrastructure.”

Large studios and content owners want on-line, real time access to operators’ billing systems not only to ensure invoices are accurate but increasingly to monitor performance so they can withdraw or change content as its relevance and therefore value declines. Lifecycles can sometimes be reduced to hours. Content owners need access to service performance and uptake so they can monitor very hot or short lived services and pull them fast if they are not going well.

Advertisers too want proof that messages are reaching the right people at the right times.

Third party providers have traditionally had little visibility into actual usage. There may be huge discrepancies and time delays between what is actually sold and revenues collected especially to post-paid subscribers. Consumers may not pay at all or, if they do, it may be long after content is sold and operators have collected. Content owners must frequently wait to collect what is due in a post-paid model.

Real time, end-to-end billing from provider to consumer makes collecting usage statistics very fast, speeds up the settlement cycle, limits exposure and give all sides more control over credit risks. It is in everyone’s interest that revenue settlement is accurate: no-one can afford expensive non-repudiation disputes.

Retail and wholesale billing are converging and operators are providing secure access to consumers and wholesalers. “Open interfaces allow real time charging for content owners who get better visibility of what subscribers are doing and can validate customers are signed up to services. How much operators will open up to partners is debatable but there will be improved communications between parties to ensure quality of service (QOS),” says Thorburn. “The key issue and urgent driver is user experience: the internet is teaching that speed is essential. People take learned behaviours and move them across different channels, they are adjusted to the internet world and want real time, not just month end bills.”

In developed markets, operators must increasingly cater to demand for family tariffs, parental control of children’s spend and access to certain services. Different family members may have pre or post paid accounts and want the flexibility to move amounts between them. They want discounts and bundled services. Dana Porter, VP marketing at Amdocs suggests: “The move to converged pre and post paid billing is about applying business logic to controlling the risks. Bundling is an old issue but still a big area of investment and operators are using it to increase revenues and ARPU. Ninety-five per cent of people in bundles stay so operators must accommodate this trend.”

Historically most billing platforms were proprietary with many developed by in-house teams, specialist vendors or bought off the shelf and customised. Now they are based on open standards. There are still few standards for how customers and product databases interact, for revenue assurance or rating and, neither should there be suggests Ericsson’s F ourie. “Standards would eliminate operators’ competitive flexibility – if they have the same technical capabilities they can react in the same way at the same speeds.”

Operators are investing in scale and performance. In developing countries billing platforms must handle huge and growing new subscriber volumes and increasing data consumption in mature markets. In saturated markets delivering QOS and increasing customer loyalty are valuable and significant drivers for change. There is resurgence in billing which has moved to a front end service ideally able to handle any type of service running over any network.

“Users have changed, are more demanding and want control and visibility,” believes Porter. “It is a big issue to ensure billing is tightly integrated with business intelligence and analytics and information are shared upstream giving operators opportunities to cross and upsell. Operators want to interact more with customers, know about their usage patterns to deliver better service levels. Partners want real time access to consumer behaviour and better transparency between themselves and users.”

Yet many operators are wary about moving into an environment in which they cannot control everything even though limiting customers’ behaviour risks relegation to pipe providers. Now that competition is biting hard, operators are consolidating billing platforms and investing in new systems to reduce time-to-market. It is a slow, expensive if essential undertaking.