|Africa and the Middle East 2006
|Converged billing – enabling African mobile
|Chief Technology Officer
|Comverse’s Converged Billing Solutions Group
Birger Thorburn is the Chief Technology Officer for Comverse’s Converged Billing Solutions Group in the EMEA – Europe Middle East & Africa – region. Mr Birger joined Comverse Kenan Billing Solutions, previously CSG Systems, as the regional Chief Technology Officer for the Caribbean and Latin American Region. Prior to CSG, Mr Birger obtained in-depth industry experience by working with some of the world’s largest wireline and wireless service providers in Europe and Latin America as a project director under Kenan Systems and Lucent Technologies. During this time, he led project teams through complex technology integration projects in order to help prepare customers as they moved to 3G networks, and consolidate their multiple billing systems to a standard platform. In addition, he worked in several systems architect and engineering roles across Europe.
Mobile communications are economically connecting regions of the world, which, until recently, were both practically and financially impossible to serve. Cheaper phones and less expensive wireless networks are crucial, but billing systems that let operators charge for, control usage, and earn a profit are equally important. Convergent billing systems, which combine the control of prepaid billing with the flexibility and range of services of post-paid, will contribute greatly to the growth of telephony, and of the local economy, in Africa.
There is no doubt that Africa has rapidly become one of the most important growth markets in GSM mobile communications outside of Europe. Since the introduction of services in April 1994, a staggering 16 million African subscribers have joined the mobile world. Now, this market is undergoing another tremendous economic revolution. Fuelled by ever-increasing interest in Africa from overseas multi-national businesses, new investment is entering the region, bringing with it new connectivity demands, such as faster Internet connectivity, that new technologies such as mobile broadband and WiMAX can bring. These, in turn, are generating new revenue opportunities for local communications operators. In order for operators to capture this moment of revenue opportunity, they must first provide these international businesses with the range of services they require to effectively ‘do business’. However, businesses need much more than voice and data; they require real-time customer management and financial control, as well, to ensure costs are brought in line with value. With the increase in economic incentives to invest in the Africa, businesses are demanding the same level of communications they experience in their home countries where fixed, wireless and IP communications are now abundantly available and have become the norm. Offering quality voice and data services will provide African countries an important advantage in their quest to capture and maintain international business markets – a primary driver of economic growth. Operators must rise to the challenge of serving these business customers and, thereby, play a key role by helping their countries reap the financial and growth rewards of the ‘African Century’. African needs As a result of Africa’s unique topography, with its remote open spaces and emerging mega-cities, mobile communications in the form of 2.5G and 3G services seems the only means to provide the needed communications services for enterprise customers. Currently, fixed networks are impractical, or too expensive, to provide the coverage and flexible installation capabilities that businesses require. Mobile, with its promise of higher network speeds and mobile broadband capability offers the ideal solution for these new business customers – high quality Internet access for remote workers. For operators in the Africa to make mobile broadband a success, and profitable, they must concentrate their efforts on creating a compelling customer experience, deliver appealing services, maintain high quality standards, treat all consumers as individuals, offer competitive prices and, most importantly, make paying for and using these high speed mobile communications as simple as possible. Africa’s unique economic environment places further demands on operators serving businesses. Like all businesses worldwide, companies in Africa need credit to smooth their cash flows – to match the timing of their revenues to the due dates of their accounts payable. Yet in Africa, with its still developing capital markets, businesses must rely on suppliers, not banks, to extend credit. Counter-intuitively, in a continent perceived as purely prepaid, the post-paid business model is more important in Africa – not less! Nevertheless, given the precariousness of cash flows, businesses also demand tighter real-time financial controls over expenditure. Moreover, in a market where mobile handsets are purchased at a premium, and where employees rely on their employers for handsets, operators need to have the ability to offer both professional and personal payment profiles on one phone to enable dual usage and payment. Capturing the opportunity Rethinking their back-office billing solutions in order to address the needs of business customers is a new challenge for African operators, who traditionally have viewed billing and customer care solutions as secondary to network coverage and reliability. Many post-paid billing and customer care systems currently in use were originally bundled with the sale of the initial communications network equipment. While in the past this was sufficient for low subscriber penetration, with the influx of new business revenue on the horizon, the mantra of ‘low functionality customized systems for small operators’ is no longer relevant. Now many operators are facing the ultimate threat – their first generation billing and customer care systems are collapsing under the pressure of the rapidly growing business sector. Indeed, African operators have less tolerance for lost revenue and are less forgiving of excessive total cost of ownership (TCO). They may, operationally, require less ‘moving parts’ within their solutions and many of them are too remote for generic off-site hand holding, but African operators are no longer small and inexperienced compared to their Western European counterparts. They are, in fact, learning through the mistakes made by their European counterparts in the past. African operators are now looking towards new carrier grade billing and customer care architectures to equip them for future growth. Ultimately, they have the highest demand in the market for systems that support businesses out-of-the-box, and rightly insist that these solutions be proven using ‘tier one’ operator standards. Prepaid, post-paid…or convergent? Choosing the right billing system to efficiently operate in this market is an important consideration. The situation the African communications market faces is quite different than that seen in more developed regions of the world. Local operators currently experience two opposing pressures. First, African economies are overwhelmingly cash-based. Consumers have few, if any, options – credit cards or checks, for example – available to them. Second, since the rollout of mobile services is relatively more expensive in Africa, there is great pressure upon operating company margins. Given the lack of communication alternatives within Africa, international businesses are willing to pay a premium to those local operators that are able to rise to the challenge and provide a good range of high quality communications services. Nevertheless, we must not forget that local African businesses also need the same or, indeed more, flexibility in their payment methods, enabling them to compete more effectively within limited credit markets, and still grow to meet the exploding demands of the African market. Previously, post-paid credit was discouraged as operators could not afford to bear the financial risks involved in the case of non-payment, and business users could not afford the risk of excessive utilisation. Given the need in Africa for high levels of cash control, a pure post-paid billing solution, without real-time credit control, is not, on its own, economically feasible. The financial gains – the additional revenues that may be generated – of attracting international businesses are often outweighed by the risks that must be assumed to do so. However, combining the flexibility of the extended credit characteristics of post-paid offerings with the strict real-time credit controls that apply typically to pure prepaid payment methods creates an ideal billing model. The result, convergent billing, is a solution that combines both prepaid control with post-paid flexibility and credit – suitable for the African reality. Real-time customer management A convergent billing system that supports both prepaid and post-paid methods, offers African operators the best of both worlds. Convergent billing enables operators to maintain their existing base of local prepaid customers and, as well, attract and serve multi-national and local business customers. However, the functionality of the convergent billing system involves much more than just combining different payment methods. The real-time nature of the platform opens up a wealth of new value-added financial services that can assist business customers to not only control, but also leverage, their budgets and spending. With both prepaid and post-paid balances available on the same account, operators can let their customers select how they pay – transaction by transaction. This enables completely predictable, controllable, monthly payments with the flexibility to top-up credit limits as and when increased communications needs so require. This control also offers invaluable security by protecting against unauthorised use where fraud is an undeniable temptation. This unique flexibility of the convergent system also offers the ability to have multiple personal profiles on a single mobile device. This is particularly important within the African market where mobile handsets are a valuable commodity. Convergent payment options enable employees to make calls to the office, customers or suppliers, for example, on the company’s bill, but use the same phone to make evening calls charged against their own prepaid balance. Embracing the convergent future Unprecedented profits potentially await local operators in Africa who actively embrace the new opportunities presented by the influx of international direct investment. Those who prepare in advance, and deliver the valuable mobile communications and payment methods these sophisticated businesses require, will be the ones to succeed. Mobile broadband with the ability to deliver high speeds and instant access can provide the crucial communications channel required to attract and satisfy overseas investment. However, this exciting new mobile technology must be underpinned by robust back-office functions in order for its delivery to be a success. Operators must look towards billing solutions that promote business growth via convergent financial functionality that offers a variety of payment methods – including variations and combinations of traditional prepaid and post-paid schemes – multiple user profiles, and charging flexibility. Convergent billing, which combines the strength of prepaid’s real-time controls with the flexibility and service options of post-paid payment methods, holds the key to unlock an important new revenue stream. Convergent billing systems will help mobile operators contribute to the continent’s enormous economic potential during the ‘African Century’.