|Issue:||Latin America 2004|
|Topic:||Billing and mediation – Making connectivity possible|
|Author:||Neil Philpott and Juan D. Saldarriaga|
|Title:||President of the Global Billing Association & Marketing Director and Executive Billing Strategy Consultant|
Neil Philpott is a Director of Amdocs and President of the Global Billing Association. Mr Philpott is the leader of the Billing Thought Leadership Programmes team at Amdocs that evaluates the impact that business trends will have upon service provider billing needs. Mr Philpott has more than 23 years of management and consulting experience working in the communications industry with fixed network and mobile operators in many European countries, North and South America, the Middle East and Japan. His expertise covers business development, management, marketing, information systems strategy, change management and all stages of the software systems lifecycle. Mr Philpott is now in his second term as President of the Global Billing Association. Juan Saldarriaga is an Executive Billing Strategy Consultant with Amdocs. Before joining Amdocs, Mr Saldarriaga held various technical positions, most recently at XACCT Technologies, where his primary focus was the development of business relationships in the Latin American region. He has spoken at numerous telecommunications and industry forums. Mr Saldarriaga holds an undergraduate degree in Computer Engineering from the Georgia Institute of Technology and a Masters of International Management degree from the University of Maryland, College Park.
Pervasive connectivity, anytime, anywhere, accessibility and an increasingly mobile workforce are driving the need for new services. Billing systems that let service providers track, accumulate and analyse the value for any combination of products and services are essential – they make new services possible. Pre-paid drove the growth of telecommunication services in Latin America and is now the dominant method of payment. Billing, likewise, will play an equally important role in the dissemination of new, third generation, broadband and content services.
The rapid pace of technological change within the telecommunications industry continues to expand the range of human interaction. The pervasive availability of voice, data, and Internet services, virtually everywhere on earth, has compressed commonly held notions of both distance and time. People are accessible and in touch anytime, any place. The mobile workforce is increasingly connected to remote corporate databases, driving many of the industry’s current efforts to provide ‘always on’ service availability. In the foreground, billing and mediation systems continue to evolve as the needs for seamless connectivity become more urgent than ever. Billing allows the service providers to track and accumulate the value for any combination of products and services, provide customer self-care, support flexible payment methods, manage expanded product and service portfolios and drive customer data analysis. Mediation connects the network to the business, providing the physical interface and software for the collection of call event information. Electronic data from a variety of network interfaces are gathered, synthesised and transformed into actionable business intelligence. As Communication Service Providers (CSPs) continue to evolve into network agnostic enablers, traditional concepts of geographic territories, service availability and access mechanisms are being challenged and redefined. The highly competitive nature of the business places customer care and billing at the heart of the CSP’s strategy – revenues and profit are dependent on billing. Billing, in turn, relies on mediation to translate network activity into chargeable events. Trends and opportunities for the communications market in Latin America In such a vast and physically challenging region as Latin America, it is difficult to build-out existing wire-line telecommunications and bring universal access to myriad remote towns and municipalities. In many of these towns today, the only available method of instant communication is often a communal telephone, or a distant telecommunications center. Long waiting lines, intermittent service, and the lack of privacy often discourage callers who would otherwise wish to communicate with friends and family. The rapidly expanding coverage of WiFi, WiMAX, and packet-switched mobile technologies promises to conquer the traditional barriers of distance and location. The lower deployment and maintenance costs of IP networks, particularly with wireless, makes it economically viable to increase bandwidth availability using existing low orbit satellite and radio- based systems. Governments, however, will have to offer adequate regulatory and investment incentives to ensure wider access to communication services. Naturally, providing broadband access (speeds of 1.5 Megabit and above) to a wider segment of the population is at the top of many government development programs worldwide. The availability of telecommunications infrastructure often makes access to other essential services, such as healthcare, possible. In communities too small to support a local hospital, travel time to obtain medical assistance is often life threatening. Expanded audio and video communications in remote clinics not only enables greater access to preventative care advice, but also helps relatively unskilled local paramedics accurately to diagnose lesser-known and potentially lethal conditions. With the proper telecommunications and devices, physicians could provide follow-up care on an outpatient basis; patients would return the associated monitoring devices after the course of treatment. Governments have an inherent interest in reducing the challenges faced by citizens in remote locations. The increased availability of public information kiosks brings common services and support closer to every citizen. Public access points can provide information on procedures for obtaining government issued identification, birth and death records, public assistance programmes or even the platforms of political candidates. Electronic voting systems for local and national elections offer more rapid and secure tabulation than traditional paper ballot systems. The referendum initiative in Venezuela provides a recent example of the use of this technology. Greater levels of literacy also contribute to a more informed and inclusive society. Remote education is one of the most efficient means of serving remote populations, as witnessed by the growing acceptance of web-based educational programmes. Electronic access to educational resources reduces the physical space and maintenance needed for public facilities, whose costs often limit their ability reach to wider segments of the population. The role of billing and mediation Billing for communication services has evolved substantially over the last few years. Billing is no longer a mere back office function that calculates time-based usage after the fact and aggregates costs for paper invoices. Billing now comprehends a multitude of parameters. Closed loop analysis offers agile and efficient revenue versus cost analysis. Billing has been drawn ever closer to the network and operates in real-time as required to ensure revenue integrity. Pre-paid has become the dominant method of payment for telecommunication services throughout Latin America. Pre-paid was initially conceived as a method of extending growth to customers without bank accounts, the underaged and credit challenged segments. The success of pre-paid, though, is partly due to the need customers experience for a mechanism to control and manage their expenditures. This is increasingly important for content services, where pricing is variable and a bigger risk of sticker shock (surprise) exists. Many customers are hesitant to sign long-term contracts with uncertain quality of service terms. Nevertheless, the majority of pre-paid customers want access to the same services as post-paid account subscribers, most notably, voicemail and SMS. Since carriers often voice their desire to increase usage among pre-paid customers, it follows that all services should be made available to all customers, regardless of payment method. The widespread industry practice of charging pre-paid customers higher fees perversely inhibits the adoption and consumption of emerging services and frustrates efforts to migrate users towards more innovative post-paid packages. In the short term, we can expect to see further advances in expanded product catalogues, rating flexibility, electronic bill presentation and payment, partner relationship management, content provisioning with appropriate digital rights management, and much more. Billing for new services, not just voice and data, imposes new charging requirements. The trend to consolidate, streamline, and standardise business support systems is already well underway. Mediation systems also play an important role in ensuring seamless connectivity for services across heterogeneous networks. Since customers are increasingly able to access the same content, applications, and transactions over a variety of networks, there will be many scattered billing records to reconcile and consolidate in the background. Only a single chargeable event, then, will appear for accounting, billing, and payment purposes. Consider the example of a customer that is listening to a live, thirty minute news broadcast while on the way home from work. During this single streamed audio event, the customer might have moved from a UMTS network through a WiFi zone, then onto a GPRS network, transit through a WiMAX zone and then back into a UMTS network. When a single provider owns all these networks, the process of producing a bill is well defined. However, if there are many interconnect records from multiple networks to be reconciled, it will be more complicated to create a single chargeable event. Customers expect a single company, his service provider, to respond to all service and billing inquiries, regardless of the number of network partners involved. Each separate service channel must be paid according to the interconnect agreements with the communications service provider, the CSP. Reconciliation does not necessarily need to take place in real-time, but it does need to be managed – both to provide customers with the most cost-effective access mechanisms available and to ensure the CSP earns an adequate margin. There are additional billing implications when the customer needs to be advised of a choice of service channels, each of which may have different cost and quality implications. Advance warning of potential charges and prior subscriber authorisation when the type, and cost, of the service changes. For example, when the customer moves about during a thirty-minute streaming event, he will expect information about price options at the outset of the broadcast. These might list limitations or restrictions listed, but can also offer the option of taking the highest quality network available. Customers that value service quality over cost will pay higher premiums, enabling CSPs to offer innovative pricing and bundling options. Summary and conclusions Globalisation, and the many products and services available to choose from, give today’s consumers the power to influence CSPs like never before. As a result, the strategic direction of service providers has shifted from focusing solely on acquiring new customers to retaining high-value customers, whose spending directly impacts the bottom line. Customer retention and satisfaction drive the industry to constantly re-evaluate its business models, and analyse the processes and practices that drive growth and increase profitability. Carriers increasingly call for a 360-degree view of their client’s needs and values. Aided by seamlessly integrated and automated systems billing and mediation systems, CSPs have an unprecedented opportunity to enhance their role, the value they provide their users and in the process – increase their revenues and profits. Educational and marketing efforts need to communicate with customers and partners in an entirely different way and focus more heavily upon selling the advantages and benefits of innovative services. Part of launching viable content services is determining how to articulate, explain, the price to the customer, including, vitally, the type and variety of payment options offered at the point of purchase. Pre-paid should be seen as just another method of payment, and not a separate market segment. The rollout of advanced communications capabilities across the region is making lifestyle-enhancing services available on a much larger scale. Billing and mediation are crucial to service provider success for, as a wise man once said, “If you can’t bill for it, it’s just a hobby.”