THE TELECOM INDUSTRY has been in transition ever since Alexander Graham Bell first gave us the telephone, said Simon Beresford-Wylie, CEO of Nokia Siemens Networks, in a presentation at this springs CTIA conference. But the last few years [have] been simply breathtaking.
Resellers could learn from this truism as the industry has continued to put the pedal to the metal, demanding ever more innovation and speedier times to market to gain competitive advantage. Its one thing to identify a trend, quite another to capitalize on it, and so quick time to market has replaced flexibility as the most important aspect of billing for the modern telecom reseller. For that, you may need a hotrod a real-time billing system under the hood that can keep up with all the good ideas the marketing folks produce.
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Openets FusionWorks framework relies on transactional intelligence in a real-time billing environment.
Real-time billing has come a long way from the crankshaft days of prepaid billing applications, which were necessary to appropriately debit accounts and prevent overages. Now, the rise of content and per-transaction rating has created a need for real-time billing across the board, as has more stringent fraud, credit and revenue leakage thresholds. And, with more subscriber-oriented, personalized service models emerging, resellers no longer can afford to wait a couple of months, or even weeks, to implement a new offer.
Real-time billing simply means being able to understand the revenue implication of a transaction almost immediately within milliseconds. Its a requirement to avoid revenue leakage for prepaid, but it also gives providers options in all kinds of ways, says Sanjay Mehta, senior director of product marketing for the communications global business unit at Oracle Corp.
For instance, a reseller wrestling with smaller and smaller margins often finds that general fraud and credit control are critical to its business model. Real-time billing gives that reseller the ability to check the credit limit of a postpaid account before delivering a service, for example, or allows the end user to see his or her latest charges, avoiding excess calls to the call center. And the convergence of prepaid and postpaid market segments has made real-time billing important to reseller business models as these providers try to better understand whats happening within their accounts.
There is certainly a blending of traditional market segments pre- and postpaid, says Larry Barker, CEO of Argent Networks Ltd. For instance, workers that have phones given to them by their companies may use them for personal reasons, so how do you charge the corporation in the morning and the individual at night? Or, consider the example of a family plan where the kids are prepaid and the parents are not. Overall, being able to enable such bundles is at the heart of convergent billing, but adding real-time to the mix allows resellers to better evaluate the profitability of the total account and curtail revenue leakage.
Fiona Fulton, Convergys Corp.s market strategy manager, says real-time billing actually can save in operational expenditures as well, despite the initial investment to implement the platform. It can absolutely be a cost savings. If you can remove the redundancies, people and products, between the prepaid and the postpaid side, and converge the platforms, you are often looking at a six-to-eight-month ROI, she explains. Not to mention the incredible amount of transparency into financial transactions that real-time can give you.
That transparency also is a key to future business models and capitalizing on content and enhanced services. In the past, batch billing was the norm; call detail records were stored on a rating server until the end of billing cycle, when the server would rate them according to charging information, then the bills would be sent to the subscribers. This approach however gives the reseller no awareness of what the customer is doing at the time of the transaction and simply amasses large amounts of difficult-to-sort-through information regarding wholesale suppliers. The more suppliers, the more complexity and opportunities for revenue problems, such as cash flow shortages and billing errors.
As we move to IP networks, realtime rating and charging has moved from something that would be nice to something they really have to deploy, and theyre looking at what they can do with their prepaid base, but now applying that across the board, says Fulton. Moving towards content is a huge driver. Every service provider is looking at a shrinking base and is pinning all its hopes on content. But its a big credit risk if you dont keep on top of the transactions. Service providers realize they cant do it in-house, so they have to partner or outsource. They need to collect the money and pay partners, and the portion of this revenue they want to move into this area is very large. So that recognition seems to have reached providers in the past six months or so that they will need a real-time approach.
The idea of financial control becomes even more critical for virtual network operators, mobile or otherwise. As opposed to more traditional rebranders, many VNOs have models that dont just wish for content revenue; many of these are entirely focused on assembling a portfolio of third-party applications and content to address a specific niche. As providers focus on convergence and delivering a total communications experience, there is an expanded supply chain, says Mehta. For every event that a consumer generates, you will have a retailer, content and media partners and possibly others that have to be paid regardless of whether the consumer pays you. Immediate settlement in the content world is the norm for such microtransactions, for example, revenue splits that can amount to pennies for a ringtone or online video clip. This, of course, increases resellers revenue exposure, adds Mehta.
Service convergence also is giving rise to new ways of tackling customer segments, and that will take the industry beyond the merger of prepaid and postpaid into a much more complex landscape. For a reseller situated in between one or more network operators, content partners and the subscriber base, settling, delivering and handling the supply chain can become a head-swimmingly complicated process, particularly at scale.
HSPA (high-speed packet access), fiber and other new network technologies will make it faster to get and deliver [what] the content users want, but with that comes complexity, says Eric Hatton, product manager for intelligent charging at LogicaCMG. You have to know what to charge for and to be able to separate out the content and the bearer. There are also more points in the network now. And as you get to the consumer electronics explosion that is surely coming, subscribers will be able to click a button to send content to a variety of devices. Thats all going to create new marketing bundles and types of partnerships that will require real-time settlement.
Rebranding and wholesale will be a big part of the picture as the walled garden continues to wither, as well. Disney is good at content; Verizon is not, says Shane OFlynn, vice president of managed services at billing vendor Openet. Communications operators will provide access to the content and the customers, first and foremost. So the business models going forward will evolve to a hedged garden, and enabling the communication between a vendor and a subscriber allows providers to have a role, providing offerings around the things they have that add value, such as real-time billing.
And, opening up the walled garden to aggregators or the Web still will require resellers to make sure they can monetize off-portal transactions. All that traffic and activity has to be settled, and you have to keep up with it, says Barker.
Meanwhile, the trend toward personalization of service bundles also will drive real-time billing. Real-time billing gives service providers the opportunity to attract new customers and package more services based on what they know about the customer, and there is a huge amount of competitive pressure, says Barker. Thus, hyper-segmentation is the hottest battleground and it takes real-time billing, because you need to be able to monetize ideas through the billing process, and you have to do it quickly.
Meeting the market demand through segmentation requires taking stock of how offers play to various customer targets. As we transfer to all-IP services, its changing the speed of business, says Mehta. Theres a push to monitoring the success of a service in real time, and as providers segment their customer base, knowing what works and what doesnt becomes critical to being competitive and efficient. Transparency through realtime billing gives resellers the opportunity to tweak service bundles on the fly.
Savvy resellers also should be aware of innovative new business models coming down the pike. You have to consider what kinds of services are targeted to the end consumer, potentially extending them beyond communications to air miles, loyalty points, any other type of unit that needs to be tracked, says Oracles Mehta. Virtual service providers and resellers must consider that real-time billing can deliver a holistic brand experience because there is a set of services targeted towards their particular segment.
Proximity services are another next wave, such as the ability to easily find the nearest coffee/meeting place with a mobile handset. Knowing when and where someone consumed a service could enable a reseller to push an appropriate ad or promotion, says Mehta. Also, well see more and more layering on top of advertising services thanks to that presence-based approach, which will create even newer business models.
Real-Time In the Lead
While billing was a stagnating market even a year ago, research firm Dittberner now forecasts the billing sector will grow at a 3.7 percent compound annual growth rate going forward, from $4.6 billion in 2005 to $5.5 billion in 2010, thanks in large part to real-time billing capabilities.
While the end to the telecom recession is a key factor in billings revival, other significant reasons include the following market trends:
Real-Time Revenue Generation The explosion of data services in mobile markets is prompting telecoms to buy billing systems for their revenue-generating direct marketing skills, and not just for their accounting dexterity. Several billing vendors are leveraging merchandising and contextual advertising techniques to boost the bottom lines of their clients.
Converging Postpaid and Prepaid Billing These used to be very different markets, but the growing use of dual use phones and the advantages of pricing from a single consolidated database are forcing the prepaid and postpaid billing markets to converge.
The Rise of Virtual Network Operators Robust billing and real-time charging is a critical need for emerging MVNOs such as Helio and Disney Mobile. MVNOs increasingly are attracted to service bureau billing solutions.
Wireline Billing Consolidation While wireless markets are where Dittberner feels most of the billing growth will be, wireline providers are making great progress in billing system consolidation. Dittberner forecasts this trend will accelerate.
The honoree has been a @Telarus partner since 2011. dlvr.it/RNTcY2
January 21 2020 @ 19:35:32 UTC