Real-Time Billing

No matter how competitively priced or how innovative a cellphone operator appears to be, customers will not stick around for long if they have trouble with their bills.

AFRICAN COMMUNICATIONS, april 2007

For all their flashy advertising and competitive promises, cellular operators stand or fall by their ability to offer the right services, introduce innovative features quickly, charge customers correctly for them and claw their cash in rapidly. That all relies on back-end billing and customer care systems, which although a small part of their total investment, are nevertheless crucial to success. Without them, customers are not invoiced and cash flow dries up.

Now they are taking on a far more important role, that of improving customer acquisition and helping to roll out new services quickly. The systems are evolving as software developers aim to sell more services to the operators and become an indispensable part of their business. And it’s a two-way street. Operators are willing to expand their systems to gain a competitive advantage.

Right now, many operators use separate systems to bill for voice, data and content services. There are also separate systems for prepaid and post-paid customers and this all results in high costs, inefficiency, customer care problems and difficulty in launching new services.

‘Without the ability to bill for new services, all the other technological advances are meaningless,’ says Peter Dykes, an editor at Informa Telecoms and Media research. In fact, says Dykes, fancy services are not the true differentiator, but rather the operator’s ability to bundle, cross-discount and bill for those services in real time.

Informa’s research shows that operators are beginning to demand converged, real-time billing systems as they try to replace declining voice revenues with new revenue from data services and strive to cut their costs as the industry becomes more cut-throat.

Historically, prepaid and post-paid subscribers have been treated separately. The two segments, however, want the same services and can be targeted with the same promotions, so separate billing systems make no sense. Combining the systems also lets operators deal with just one supplier, requires less hardware, lowers the operational costs, and helps them cross-sell new services.

Changing trends as the operators deliver more content, such as music and movie clips, are also forcing the software developers to become more flexible, especially as the business models are still evolving for who earns what in the supply chain. The copyright holders, content developers and aggregators all need a slice of the income, and traditional back-end systems will struggle to divide up the cash.

Not surprisingly, there is a growing demand by operators to have a third-party specialist handle the entire billing process on an outsourced basis. Smaller operators may find it far more cost effective and downright easier to trust that complexity to a well-established player rather than try to run the sophisticated systems themselves. That could prove particularly popular in Africa, where many of the 100-plus operators are small and technology skills are in short supply.

Germany-based LHS and its Russian rival CBOSS, are both keen to win more business in Africa. CBOSS moved into Kenya last year to target the developing African market and to better serve existing customers, Millicom in Tanzania and Ghana for example. Implementation of this system in Senegal is under way, and new projects in several countries, including Nigeria, are about to start. African operators are being forced to expand their capacities rapidly to keep up with racing subscriber numbers, and CBOSS says its offerings will support fast network expansion for networks serving from 10 thousand to 10 million customers.

Its real-time billing system is designed for operators, mobile service providers and virtual mobile operators that run their own-brand offerings over the network of another company. Its features include the ability to manage business risk through real-time authorisation and event charging; offer voice, data and content as prepaid or post-paid services; and create ad-hoc marketing campaigns and innovative loyalty schemes. When it says real time, it means it. With a processing time of less than 100 milliseconds to boot. CBOSS, like all the other players, also promises to lower the cost of ownership compared to other systems.

Rival player LHS claims its billing and customer care systems allow fixed and mobile players to introduce new services fast, to drive their revenues up while keeping operational costs down. Its most recent win was Wataniya Telecom in Algeria, which installed a customer care system from LHS sold as a package with a billing system from HP. It is billing for all voice calls made by Wataniya’s 3-million customers and handling the newer messaging and entertainment services. The move made Wataniya one of the first mobile operators in the world to install a billing solution that manages voice and data for both prepaid and post-paid customers.

‘Wataniya is increasing its competitive advantage through unmatched customer service, and seamless, convenient billing is playing a role,’ says Wataniya’s chief operating officer Joseph Ged. Analyst Elisabeth Rainge of research house IDC praised the move. She said Wataniya’s approach had the potential to transform billing from a cost centre into a competitive advantage. ‘In today’s fast moving and competitive market, smart mobile operators know they can’t launch the new data and multimedia services without an advanced billing system that is efficient, highly adaptable and pain free for customers.’

In February LHS launched new stand-alone software, iX Collections, which automates debt collection to rules defined by certain events. As soon as an invoice is overdue, for example, email reminders are sent to top tier customers, while less cherished customers get a routine letter of demand. If the bill remains unpaid for a month, their services can be barred and automatically reinstated when the debt is paid. “The automatic and timely handling of the debt collection process helps a carrier secure its revenue streams,” said LHS Chief Technology Officer Jens Troetscher.

Overall, however, the trend is towards integrated systems where debt collection is just one part of the big picture. ‘Real-time billing is a key requirement for the next generation of billing systems in Africa,” says LHS Product Marketing Director Antonia Walter-Krisch. “With high prepaid penetration, an important driver for real-time billing is the convergence of prepaid and postpaid platforms. To offer their prepaid customers new innovative services, such as GRPS data and entertainment services, African operators have started to implement real-time billing solutions for more sophisticated service charging.’

Many existing systems for prepaid users have few charging options, and limit real-time billing to only a price per minute and a basic bundle of free SMSs. ‘To provide more customer-focused services, like real-time promotions, community services, home-zone rating or best-option tariff plans, they need the same flexibility that is common for contracted subscribers,’ says Walter-Krisch.

A converged billing system can cope with value-added services, and using the same platform for prepaid and postpaid reduces the running costs. The systems also gives post-paid subscribers cost awareness and spending controls; without this, people may be reluctant to use new services. Low-balance notification and cost notification by SMS when a call is completed are simple features to win their trust.

Another specialist, EppixComm, claims to tackle places or situations where its competitors fear go. This Indiana Jones of billing systems says its boldness and innovation has won over 35 companies as customers in Africa. These include MTN, Vodacom and Celtel. It is estimated that about half the subscribers in Africa are billed through its systems.

Like its rivals, EppixComm is focusing on convergence between the prepaid and post-paid markets so operators can enjoy cross-fertilization opportunities. EppixComm says those converged solutions help guarantee customer satisfaction by developing competitive tariffs, discounts, packages and services. They allow an operator to profile and manage customer segments and proactively market services to protect and grow their revenues.

Operators should not continue to maintain separate systems that perform similar tasks, the vendors agree, because even when multiple systems are interfaced they are more cumbersome and expensive to run.

Writer: Lesley Stones, IT Editor With Business Day