Home Asia-Pacific II 2006 Convergent billing and personalization

Convergent billing and personalization

by david.nunes
Andrey MorozovIssue:Asia-Pacific II 2006
Article no.:9
Topic:Convergent billing and personalization
Author:Andrey Morozov
Title:President and CEO
Organisation:CBOSS Association
PDF size:60KB

About author

Andrey Morozov is the President and CEO of CBOSS Association, a transnational company and the largest software vendor in Eastern Europe. His career in IT and telecommunications spans nearly 20 years and includes extensive experience in virtually all aspects of CBOSS’s operations, from product development to implementation project management. Mr Morozov has been in charge of CBOSS since its inception at the end of 1996. Prior to CBOSS, he worked with Moscow’s first cellular operator as lead programmer, as Project Manager and, finally, as the Head of Software Development. He began his career as an analyst at a governmental agency. Andrey Morozov earned his degree in Applied Mathematics.

Article abstract

Billing solutions, once simple administrative systems, are now an essential piece of the telecommunications industry’s revolution. Competitive pressures, new technologies, the convergence of mobile and fixed services and new forms of pre- and post-paid payment have multiplied options that operators must offer. Billing complexity has grown accordingly. Today’s ‘converged’ billing solutions quickly and flexibly handle new, sophisticated service options and make it possible for operating companies to offer quickly – and bill – new services; they make a vital competitive difference.

Full Article

Billing systems were once just that, systems for billing, for rating or determining the cost of a particular call. There were no customer surveys, customer support, inventory support, or any of the features that we expect in modern systems. Today, billing, like OSS, operational support systems, information, is essential and should be available on the desktop of every employee who needs it. What does convergence mean? The term ‘convergence’ is widely used but widely misunderstood. The word stands for the ability of a system to process heterogeneous streams of information in a uniform manner, such as the ability to charge and bill for different services in one system. For a thorough understanding, however, one needs to look at this from a carrier’s point of view. The telco focuses on revenues and broadening its subscriber base via personalized services. Looking at contemporary subscriber choices will help give a customer-centric, personalized definition to ‘convergence’. Content convergence Telcos faces a complex task when dealing with increasingly fastidious, even capricious, technology-savvy subscribers, and the complexities have increased due to the intrusion of next-generation technologies such as Java 2 Platform Micro Edition that shift the traditional boundaries of voice, music and video. Converged telecommunications solutions deliver all types of network services, but are feasible only when the network service provider converts the traffic to an asynchronous transfer mode or Internet Protocol stream. These services require a single means of access and transmission, via a facility with a single, unified, switching infrastructure. Fixed-Mobile convergence The fixed-mobile rivalry has fixed operators scrambling to stop customers switching to mobile carriers and mobile operators struggling to break free of the constraints of basic cellular voice services. The answer is found in network convergence. Full-service telecom carriers have recently begun to bind their fixed and mobile products together and merge their networks to become everything to everybody. The great lever is Internet Protocol technology, which enables the combination of fixed and mobile switching layers. Different user needs compel carriers to be more flexible. Many carriers no longer wish to serve merely as pipes for general connectivity services and are trying to become content, brand, handset and service tie-in conglomerates. Convergent billing Convergent billing is the core issue. For many carriers convergent billing is both a subscriber-oriented solution, with bills for multiple services in a single invoice, and a platform uniting two different systems. The combination of postpaid billing with a prepaid platform permits the management of subscriber accounts and recording of various integrated services. Basically, subscribers consist of two principle groups: postpaid and prepaid. For charging postpaid calls a billing system is essential. In fact, there is a need for a database in which call detail records, CDRs, are loaded. CDR files are generated by a mobile switch center, MSC and contain all the information about the calls: the subscriber’s number, the number being called, the calling time, etc, as well as the management interface and the logical instructions needed to process the CDR according to the subscriber’s particular tariff plan. Normally, billing system hardware consists of a server and a mediation device, MD – a buffer computer that converts CDR files into a format suitable for importing to the database. However for charging prepaid subscribers, an additional ‘intellectual’ platform must be at hand. The switch, instead of connecting the calling subscriber directly, sends an inquiry to the system and, if the balance allows, the system sends back its ‘permission’ for the affordable call duration. As soon as the limit is reached the system disconnects the call. The system that controls prepaid calling manages the entire process of call authorization and accounting in real time, evaluating the available credits and quotas to assure that prepaid customers have sufficient credit to initiate the call and, thereafter, that their usage does not exceed the account balance. Today the benefits that real-time billing brings have outgrown those of pure, after the fact, revenue control. Due to the difference in equipment and process technology, CDRs of postpaid and prepaid subscribers are initially located in physically different systems. Obviously, a series of challenges emerges such as producing a unified report form, collecting statistics and, crucially, account management. Convergence – customer benefits The convergence of prepaid and postpaid system – uniting the two systems within a single one – results in the creation of a single database for both postpaid and prepaid systems. The key feature of the converged solution is the creation of a single contact point, a single source of information and a single point of interaction with the operator’s subscriber base. This economises resources and smoothes the integration of services such as SMS, WAP, MMS, GPRS, content, etc. Converged solutions also make a broader range of services available to a broader range of subscribers including prepaid users. The family-oriented solutions are an example of new services made possible by convergence. The youth market has huge potential, for handset sales and value-added services, but new markets pose new challenges. Parents want to monitor and control their children’s mobile usage and spending without resorting to such restrictive measures as blocking numbers or services. With convergent services, parents can control spending and other usage parameters by blocking calls other than those they permit. Convergence – operator benefits Convergent billing systems, with a single subscriber database recording the subscriber’s history, enhance a carrier’s agility and ability to respond to its customers’ wishes. With convergent billing systems, the carrier also operates in a common invoicing, payment, customer and self-care environment. It can make use of service-based account selection, for example mobile commerce only with prepaid, whilst using a single rating – cost calculation – engine. Common bonus programs are also available when a converged solution is used. Real-time service provisioning enables ‘one-to-one’ marketing that attracts subscribers, creates customer intimacy, stimulates usage, encourages loyalty and facilitates fraud reduction. Truly personalized convergent billing systems are designed to provide seamless integration of the post- and prepaid systems. This is done by logically harmonizing the functional environment to enable a single balance management solution, a single rating engine to calculate services, and a single tariff creation. These systems also offer scalability and open interfaces that eliminate the need for software and technology changes to handle the growth of the subscriber base. The open architecture of convergent solutions lets them communicate easily with a broad variety of third party networks and BSS, business support system, components. The telco’s services, including voice, are migrating more and more towards IP networks and moving into NGN, Next Generation Networks, spaces. Personalization is supposed to ensure the usage of existing network services while, at the same time, enabling provisioning of new services built on future networks and protocols. Naturally, it must be every vendor’s priority to ensure that it serves its customers competitively. A single, converged billing system that simultaneously serves prepaid and postpaid subscribers facilitate flexible changes of subscribers payment scheme’s. The great potential of convergence lies in its ability to provide for a customized insight into a broad range of customer management issues. Converged billing solutions can provide completely new subscription types based on the convergence of functions of pre- and postpaid services. Converged solutions can even offer postpaid services combined with the minimal risk of revenue loss normally associated with postpaid schemes. Carriers, for example, could impose credit limits based on the customer’s ability to pay and control postpaid accounts using tools developed for prepaid accounts. Subscribers can be assigned, or even request, a real-time postpaid limit; upon reaching the limit, the subscriber can opt, or not, to continue using the services on a prepaid basis. Control over both prepaid and postpaid usage takes place in real time and greatly benefits consumers that wish to control their spending. Separate, differentiated, rating schemes and promotions can be offered both to postpaid and prepaid users, and bonus money granted, according to pre-established criteria. Convergent billing solutions can also help telcos build a stronger competitive profile. Spice Nepal Private Limited is the first private cellular company in Nepal; it is headquartered in Kathmandu. Spice Nepal, a start-up operator, began providing services in September 2005. The telco faced a highly complex competitive challenge. To compete with its principle rival – Nepal Telecom, a state corporation – it had to operate in a hostile environment. In a tough situation such as this, following the right strategy was extremely important. They needed to find a competitive edge over their rival. Ultimately, Spice Nepal opted for a converged billing solution that let them significantly diversify their service package. It worked; Spice Nepal has tripled its customer base since the deployment of its convergent billing solution. Sooner or later, given their clear advantages, converged billing systems will replace split solutions. We are already seeing the transition to Next Generation Networks, but it will take an industry-wide effort by both vendors and carriers, promoting a customer-centric, personalized philosophy to help them succeed.

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