Posted: 10/1997
The Internationalization of the Telecommunications Market
How Language and Currency
Affect Customer Care and Billing Systems
By Chris Rees
The U.S. telecommunications industry is undergoing a dramatic transformation. The sector is experiencing increasing consolidation, as well as rapid growth funded by entrepreneurs tapping venture capital, equity and other high-yield financial sources. Investor interest is also intensifying, as evidenced by the success of US WEST's $4.1 billion bond offering and Lucent Technologies' record-breaking $3.025 billion initial public offering.
The industry's transformation is being fueled by a number of factors that include the introduction of the Telecommunications Act of 1996, the rapid pace of technological advances, growing demand for better telecommunication services and increasing globalization. Many industry observers believe that success in the new business environment will be achieved by companies that can bundle many services.
Globalization Is an Important Force for Change
As telecom systems around the world are privatized and opened to competition, major players are positioning themselves to compete on several continents. U.S. companies seeking to participate in fast-growing markets abroad face sharp competition from Deutsche Telekom, France Telecom and the like.
The promise of finding other sources of income outside traditional home market revenues has brought about many global alliances. The pending BT-MCI merger is an example of how telecommunications companies are seeking alliances or mergers to leverage each others' assets and enter new markets. The Unisource (AT&T, Telia, PTT Netherlands, Swiss PTT and possibly STET) and GlobalOne (Sprint, Deutsche Telekom and France Telecom) alliances are other examples of telecommunications giants joining forces to create a more competitive, more international presence. Together they can provide a huge array of services in many countries and, more importantly, are in a position to offer large multinational customers the sort of highly customized and packaged portfolio of products and services they need.
Customer Care and Billing Systems--An Increasingly Competitive Weapon
Central to a telecommunications company's ability to bring products to market quickly, contain costs and offer superior customer service is its customer care and billing system. A huge shift has occurred in the last 10 years (and far more recently in Europe, where competition has only recently become a reality) as customer care and billing has migrated from being an expense to becoming a corporate asset.
Indeed, it was not until recently that customer care became a much-used term. In the past, telecommunications companies talked about billing, but no real concept of customer care existed. In most cases, telcos did not know who their end customer was, as they were in the business of managing lines or connections and the end customer was less important.
The Focus Is on Customer Loyalty and Retention and Reducing Time-To-Market for New Products and Services
In telecommunications as in any other industry, when a customer has a choice of providers, customer satisfaction is the key to a provider's success. The acquisition of new customers is invariably much more expensive than retaining existing ones.
To indicate how serious telcos are about having the best possible customer care and billing system, one need only look at the investments they are making to update their existing customer care and billing infrastructure and implement new systems to give them a competitive advantage. AT&T recently signed a five-year contract worth $1 billion for the provision of customer care and billing services.
Most U.S. telcos are now investing significantly to move into a new generation of customer care and billing systems so they can survive in an increasingly competitive market. It would be reasonable to expect them to leverage the huge investment they are making domestically in customer care and billing solutions to benefit their initiatives outside the United States. AT&T, for example, presently uses a variety of billing platforms. To gain competitive advantage over other global players, it would make sense to pull together all the company's billing capabilities and implement one highly flexible system to manage its global clients.
Language Considerations Are Numerous
Almost every business process is at some stage touched by a function in a customer care and billing system. In Europe, some of the challenges of international customer care and billing are more clearly understood, as they are a part of everyday life. For example, within some European countries multiple languages are spoken, such as in Switzerland, whose population of approximately 8 million includes German-, Italian- and French-speaking people.
The challenge to a customer care and billing system of handling even three languages is immense. From a customer care perspective, a company or private customer must be able to talk to his customers in the language with which they feel most comfortable. Unless the customer care and billing system can cope with that language, and multilingual operators are put in place, these customers are unlikely to stay with their telephone company in a competitive environment where alternatives exist.
Assume, for example, that Mr. Duponchel, a hypothetical subscriber, calls a customer service center to order a second line. He speaks only French. When he calls from home, he is automatically transferred to a French customer service representative (CSR). But in what language are the customers' notes and history maintained? Suppose the customer calls from a mobile phone or a pay phone. Clearly a system could transfer a call and customer data seamlessly from one operator to another using computer telephony integration (CTI) technology. But what about his bill? If the bill includes marketing messages, they need to be in the customer's native language.
In short, telecom providers need a customer-focused system in which information about a customer always remains with that customer, even if he moves from one location to another, and the customer details are kept in his or her preferred language.
If the customer care and billing system is fully data-driven, this task becomes easier. Some systems have been designed to be reference data driven. A unique identifier (field number), which sits in a table and is mapped to the appropriate language, references each field in the CSR's screen. The CSR can choose the language in which he operates and also identify the preferred language of the customer. Incorporating an additional language involves the relatively simple task of translating all the screen field definitions to the additional language.
Some complications do need to be considered. In Spanish, for example, most words are longer than English words, so abbreviations must be used. Further technical challenges exist with languages like Chinese, in which double-byte character sets are needed, or Arabic, which is written from right to left.
Multilingual capabilities also need to be taken into account when offering customer care and ordering facilities over the Internet. Customers must have the ability to select their preferred language through an Internet interface just as they do when talking to a CSR. This has the additional benefit of eliminating some of the complications of multilingual CSRs as well as reducing CSR costs, which usually constitute a major proportion of total customer care and billing expenditure.
At the bill level, telecom providers also need to design a customer care and billing system that is reference data-driven for payments, charges, called locations and service types. Customers should be able to select the billing language they prefer during the ordering process. At a simple level, a code would exist for each billed item. This code would reside in a multilingual table to allow a choice of languages on the bill.
At the collections level, a template of letters would exist in multiple languages to allow the CSR to send out letters in different languages. This process can probably be accomplished more easily by interfacing to a word processing system, for collections and other standard letters.
Currency Is Also an Important Part of the System Design
At the simplest level, having two or more currencies in a customer care and billing system is, like language, a relatively easy thing to do as long as it is reference data-driven. The interesting thing about a country's currency, though, is that it changes dynamically in relation to other currencies. Also, some currencies use a decimal point, and some currencies experience huge inflation (in some cases hundreds of percent per year).
Consider the following example: A U.S. company with subsidiaries in France, Germany, the United Kingdom and Austria seeks the best rate for its communications needs. The customer asks its global provider to aggregate in U.S. dollars all charges, including those of the European subsidiaries, and apply a bulk discount. The customer then asks that the discount be replicated back down the hierarchy and each local subsidiary be sent an invoice in the local currency, as well as summary details sent to the corporate headquarters in the United States.
Suppose the customer then decides it wants to pay the entire bill in U.S. dollars and that the European subsidiaries should receive summary-only bills. In addition to this, assume that after two months, the French subsidiary realizes that it has been overcharged by 10 million French francs, and during this time the French franc has devalued by 20 percent compared to the U.S. dollar.
This scenario presents a whole range of issues and potential problems that a customer care and billing system will need to be able to manage. It is a challenge for both information technology systems and for policy. Credit card companies and banks have been faced with these sorts of problems for some time and have come up with some solutions. These solutions are, however, not as flexible as those that telecommunications companies will need to implement.
One telecom solution is to normalize all currencies to a base and update the base at regular intervals. A similar system is used for GSM (Global System for Mobile) roaming clearing in Europe. In Europe GSM companies have roaming agreements with each other and even outside Europe in countries which have the same GSM-standard network. These roaming agreements define the process whereby a customer can visit (roam) on another country's network and be reimbursed for hosting those calls.
If a customer of ABC Cellular in Spain uses his GSM mobile telephone on XYZ's network in Germany, the German company will rate the call in Deutsche marks. It will then be converted to a normalized rate (called SDR) which is published and updated regularly and used to create a special record (called TAP). These TAP records are settled by a clearing house, of which there are three in Europe. ABC Cellular in Spain will then convert the normalized rate to pesetas and will settle with XYZ in Germany. This solution has been working for some time in Europe and seems to be successful.
In Europe, the Euro will significantly simplify currency issues and inter-carrier settlements. However, European telecommunications companies will undergo a transition time in which they will need to support both the Euro and their home currency. This issue needs serious, immediate attention for customer care and billing systems not designed to support multiple currencies.
Large international corporate clients will almost certainly need individually negotiated contracts which outline the process for refunds, deposits and payment terms in detail and which cover every eventuality. These clients also will need a facility to change the structure by which they are billed, so that they can make use of tax benefits in certain countries.
Any telecommunications company seeking to be a truly global player needs to consider the effect of language and currency on its customer care and billing systems. Consideration must be given both to the design of the system and to the business processes put in place for managing interconnection and settlement between carriers; the method of calculation and issuing of refunds; customer service center design and management; interactive voice response technology uses for inbound multilingual customer queries; the use of the Internet; and other areas.
All must be evaluated as part of a total business strategy that decides what services should be offered, in which countries and to which customer segments.
Chris Rees is a senior consultant at American Management Systems, London office. American Management Systems Inc., provides customer care and billing solutions for communications firms. He can be reached at 44 1753-746515.
