|Issue:||North America 2006|
|Topic:||Billing in a converged world|
|Title:||Executive Vice President and COO|
|Organisation:||BSG Clearing Solutions, North America|
Greg Carter is the Executive Vice President and Chief Operating Office of BSG Clearing Solutions. Mr Carter joined BSG Clearing Solutions (formerly Billing Concepts) in 2004 with extensive executive experience from a number of communications providers. His first-hand knowledge about the industry was gained in positions at Nii Communications (Payphone Channel), Qwest, Aptis Software and U.S. Long Distance. Greg Carter earned a degree in political science from the University of Iowa.
Nowadays, the cell phone is more then a phone, it is a service delivery device. Mobile operators must continually offer newer, better services to survive the competition. Live TV, digital radio, m-commerce, banking transactions – to name a few of the newer services —all come from different service providers. Billing the subscriber for the services used – and then distributing payments appropriately to the providers — is a tremendously complex problem that can often be most efficiently resolved by third-party clearinghouses.
It is official. Convergence, once the hottest buzzword in an overzealous industry and one of the biggest disappointments in the dot.com crash, is finally here. It is a reality in numerous industries, but nowhere as visible as in the ever-evolving and finally re-emerging telecommunications industry. Everyday new and innovative technology is available. For example, not too long ago, your cell phone was simply a tool for making phone calls on the go; today they are vehicles for the latest and greatest cutting-edge crazes. Today, if you cannot access the Internet through your mobile phone, you are in serious jeopardy of being considered un-hip. Furthermore, if you are not downloading catchy ring tones, video games, the latest Beyoncé hit, or an MTV video sensation, you’re… well, let’s just say you’re probably not terribly in tune with today’s incredibly connected culture. Cell phones also double, and triple, as cameras, video consoles, tiny stereos and even mini TVs. With such easy access to all sorts of fun and useful services, almost anyone with decent credit and a cell phone can take advantage of the latest content offerings. Make no mistake about it – now that consumers have had a taste of these sweet new technologies, there is no turning back. With a hungry market, and money to be made, consumers and carriers will continue to drive the market, and drive it hard. Deals in fixed/mobile convergence are popping up everywhere and subscribers are taking advantage of the subsequent offerings. Some of the most recent announcements on the subject include: MobiTV is providing live TV broadcasting services to mobile phones on Cingular and Sprint networks; Sprint has teamed up with Sirius satellite radio; Sprint also recently hit the one million mark for mobile song downloads. Content providers are anxious to partner with mobile operators because of the untapped market potential and mobile operators are equally anxious to sign deals with content providers to remain ‘innovative’ and ‘competitive.’ Market research indicates that operators will continue to expand their offerings and users will keep taking advantage of them. One of the recent developments, called ‘M-Commerce’, lets people shop and handle bank transactions over their mobile phones. What is next and how can fixed-line service providers get in on the action? One thing we can expect to see in the not so distant future is people charging purchases of all kinds, from downloads to tangible consumer goods, to their phone bills rather than credit cards. Research shows that, for convenience and security-related reasons, people are much more likely to pay for convergent technologies if they can choose how to pay for them. Many would rather charge purchases to monthly statements from their phone companies than to their credit cards. Charging online and/or offline purchases to a phone bill, according to a 2005 Yankee Group consulting report, is a convenient and practical alternative for the 40 per cent of Internet users in the US who do not have credit cards.. Charging purchases to the phone bill is also a welcome option to the 50 per cent of credit card holders who are reluctant to submit credit card information online. It is easy to see how payment by phone bill could become a viable and regular payment alternative for shoppers. How convenient it would be to order the latest bestseller and charge it to your phone bill without ever having to pull your credit card out of your wallet! Of course, getting access to their subscribers’ service bill will benefit carriers as well, opening up new sources of revenue and helping them retain customers longer. We can expect mobile operators to be the first to offer innovative services like these but, given the increased competition and hefty pricing pressures LECs (local exchange carriers) are facing from their wireless competitors, it won’t be long before they follow with similar offerings and a variety of billing options as well. Of course, these exciting and innovative advances do not come without their own set of complex complications. Service providers will now face the massive back-end challenges associated with managing really large networks of customers, partners and technologies. The billing challenge Clearing, settlement and, ultimately, billing stand out as the most pressing and complicated issues now facing service providers of all kinds. As the market for content grows, so does the need for more comprehensive billing structures. Long gone are the days when consumers received a simple bill for monthly service at the end of each billing cycle. These days, phone bills, both wireline and mobile, are likely to include fees for news subscriptions, music and ring tone downloads, security services, online dating, pictures shared, text messages sent, minutes used and even television shows watched. In the not so distant future, bills could also include invoices for consumer goods purchased. That, however, is just the beginning of the complexities. In addition to billing customers for services rendered, service providers must also arrange for settlement with all of their content partners in an accurate and efficient manner. Multi-party settlement If settlement only consisted of issuing bills and collecting payments from subscribers, any billing administrator equipped with a calculator and spreadsheet could handle the job. In addition to the inherent complexities that come with managing transactions between the many players in the convergent technology market, each service provider must also manage customer debt, settle with partners, assess its customers’ credit and risk, manage large-scale processing, and create and administer pre-pay and post-pay accounts and it doesn’t end there. Security issues and risk management offer an even greater level of complexity. Multi-party settlement services are an attractive resource for wireless and wire line carriers looking to unload the hefty wholesale billing burden — and associated risks — off their corporate shoulders. It is also an attractive option for the partner companies because it adds neutrality to delicate and multifaceted business relationships. Much like roaming on other service providers’ networks and then paying for it, settling with content partners can be a massive undertaking. Operators may have advanced automated billing systems capable of handling millions of transactions, but these systems are inadequate when each content partner requires a separate interface, as they often do. The heavy load of content transactions that many carriers handle often causes months long delays in payments to partners. While large companies can afford to wait, smaller content providers are unlikely to survive under such circumstances, and that is a big problem when many carriers rely on smaller partners for innovative, fresh ways to contend with the competition. Settlement clearing houses enable the efficient distribution of fees to all involved parties. Because it can indiscriminately administer billings and payments to all partners, a third party functions as a cohesive, single-source solution provider. When problems arise in the billing arena, there is no question about who is responsible for the solution. Multi-party settlement also helps enable the diversification of available choices for consumers by managing industry gateways and opening up a variety of payment options – such as paying by credit card, phone bill, direct bill or the increasingly popular e-wallet payment options – which progressive carriers can greatly benefit from. Offering millions of subscribers a variety of payment options could get rather complicated for an operator handling its own billing. With extensive billing capabilities like those of settlement clearing houses, offering an array of choices can be a competitive differentiator and not an accounting nightmare. Innovative multi-party settlement providers can also offer an increased level of security and risk management. Because a single clearinghouse monitors processes, issues like identity theft and fraud are easier to detect and prevent. With all the challenges that clearing, settlement and billing present in today’s brave new telecom world, multi-party settlement presents a convenient and reliable alternative to wireless and wire line companies alike that would prefer to focus on revenue-generating services and offerings rather than get tangled up in the intricate and tedious billing web. Ninety-five per cent of the telecommunications industry relies on outsourced multi-party settlement services. Is your provider ready for next generation convergent clearing and a focus upon customer service and new services? Are you ready?