Home Asia-Pacific III 2012 The road to multi-play successHow service providers can optimize assets, increase profitability and boost customer satisfaction

The road to multi-play successHow service providers can optimize assets, increase profitability and boost customer satisfaction

by david.nunes
Lucas SkoczkowskiIssue:Asia-Pacific III 2012
Article no.:4
Topic:The road to multi-play success
How service providers can optimize assets, increase profitability and boost customer satisfaction
Author:Lucas Skoczkowski
Title:CEO
Organisation:Redknee
PDF size:243KB

About author

Lucas Skoczkowski is the CEO of Redknee, a communications software company created in 1999 that provides business-critical billing and charging software and solutions for communications service providers around the world. Lucas is responsible for strategic planning and execution, during which Redknee has consistently met and exceeded its goals, including financial performance, profitability and business and customer growth. Lucas is driving the development of Redknee’s product portfolio, sales, and overall organizational performance. Due to his exceptional leadership, Lucas has received the Ernst & Young Entrepreneur of the Year Award and the Top 40-Under-40 Award for Canada.
Prior to Redknee, Lucas worked at Nortel Networks and Clearnet in various roles of Product Management. Lucas serves on the Board of Directors for Redknee and 20-20 Technologies, the world’s leading software developer of interior design and manufacturing software, and is a member of the Dean’s Development Council for the Faculty of Engineering at the University of Waterloo. Lucas has a Bachelor of Science in Electrical Engineering from the University of Waterloo.

Article abstract

Offering multi-play necessitates integration of separate channels under one system. Trying to do that with the various parts of legacy systems will not work. It is like a restaurant offering a different menu depending on the chosen means of payment. The whole system should be now built for real-time, with pre-paid convenience enhancing the traditionally post-paid service. Real-time accounting can also discover fraud and revenue leaks immediately, instead of waiting for month end billing, thus reducing cost. Costs should also be tracked, since ARPU figures alone may be deceiving. With a unified system, carriers can combine data from all sources and gain deeper customer insight that allows proposing enticing offers. Such capabilities also allow Telcos to act as advertising aggregators, adding profitability.

Full Article

the years, service providers have pulled together various systems and solutions into their business and operational support systems (BSS/OSS), usually to solve a very specific problem or enable a very specific service. As a result, multiple applications for billing and customer care that were never designed to integrate efficiently collect in service providers’ back offices. Because of these separate, siloed systems, entire telecom departments have evolved working independently from each other.
A multi-play service provider’s business often consists of four channels: mobile, high-speed Internet, IPTV and fixed voice. No one channel should operate alone. If efficiently coordinated and integrated, each channel will enhance all of the other channels. Greater inter-channel communication comes from integration, the ability to be agile and responsive, share useful customer and market intelligence, to cross-sell services, to deliver relevant offers and to create a broad, coherent bundle of services that can be offered to all customers.
Conversely, service providers who cannot integrate their multiple billing and reporting platforms are limited in what they can offer to customers. Multi-play capability is intended to provide synergies and greater economies of scope, allowing service providers to take advantage of lower marginal costs. Without that capability, operators are left to promote each channel individually.
Creating a seamless user experience
One of the most important aspects of infrastructure agility is the ability to support the broadest range of service delivery possible. Consider this analogy: upon walking into a restaurant, the host asks whether you intend to pay cash or credit. Depending on your answer, he gives you a different menu, specific to your payment method. As strange as it sounds, that’s precisely what most telecom companies do. Without a unified billing platform that cuts across pre-paid and post-paid services, these companies are left to offer customers a different set of services depending on their payment entry point.
The penetration of smart phones continues to see rapid growth. For instance, GFK Retail Asia reported that smart phone adoption grew in South East Asia by 62 per cent in Q2 2012. With this growth, the wisdom of having combined delivery options becomes more apparent. In short, the virtues of ‘real-time convergence’ are compelling. It provides a seamless, transparent and controllable service to your customers, while allowing service providers to react faster to market events and customer needs. For example, if you reach the bandwidth cap on your post-paid mobile Internet service, your service is cut off or throttled. Having a payments agnostic billing system would allow the service to continue through a pre-paid top-up or ‘turbo button’ that can be activated by the subscriber. Adding pre-paid convenience to a traditionally post-paid service gives the subscriber the service and the quality they want, and an immediate new revenue stream for the service provider.
Tracking profitability, not just revenue
Service providers consistently use ARPU as a measure of their business performance. However, profitability per user is more effective than ARPU in measuring a multi-play service provider’s performance. While most multi-play service providers are good at understanding usage patterns, they often do not have enough insight into the actual costs associated with individual users. Average revenue figures can be useful but deceiving. Unless you can drill down to the fine-grained costs, you may not discover that a customer generating US$200 per month is actually costing you US$250 per month in customer care calls. Revenue is only part of the story. Service providers need to have a highly granular, subscriber-level view that looks at costs – as well as revenue.
Know your customer
Where great analytics leads to better products and more useful customer segmentation, the next points of business leverage are personalization and cross-channel promotions. Marketing outreach needs to be sensitive to the subscriber’s channel, language and preferences – such as the desire to opt-in and receive outbound messages about specific services and content. This is especially important as content partnerships continue to grow and the service provider is leveraged as the advertising channel.
The key is remaining contextually relevant: having the ability to send offers when they matter. Being relevant often means being real-time as well. You must be an agile marketer to support messages such as, “I see that you’ve opened up your browser but don’t have a data plan. Would you like to try one for the day/week for only US$5?”
Customer self-care
Subscriber self-care is both a low-cost method of delivering support and a way for the customer to feel like he is truly in control. Customers appreciate fast activation, to review their account balance and easily sign up for new services without having to go through a customer care agent. Service providers benefit as well. In fact, we conducted customer study and found that moving post-paid subscribers to a real-time environment significantly reduced revenue leaks. In this survey, service providers were able to reduce their bad debt losses and collection expenses from between 5-7% to 1-2% by identifying leaks more quickly. Fraud that would not have been identified until the month end bill cycle was flagged immediately with a real time system in place.
The power of convergence
If you truly want to transform you company into a marketing machine and differentiate yourself from your competitors, renewing your tools and systems is the first step. If billing systems and reporting systems are not integrated, it is difficult to fully explore customer data across the organization. You may be able to create high-level reports by market or service channel, but it will be cumbersome and time consuming to dig down and analyze a particular customer’s usage across multiple channels. Convergence is also necessary when supporting rewards or loyalty programs as well as increasing your network and services visibility and allowing you to feed intelligence into your product design and customer acquisition/retention activities.
The iTSCOM story
iTSCOM is a leading Japanese provider of cable TV, broadband and digital telephony services, based in Tokyo. With the tremendous growth in Japan of broadband, in addition to other next generation services, strong competition and the high demand for advanced devices and the services they enable, iTSCOM saw the need to revise its business strategy to get ahead of these quickly changing dynamics, drive customer acquisition and retention and support new revenue streams.
One of its key objectives was to attract and retain customers with new offerings, new services, and provide a more meaningful and responsive user experience. Its legacy solution was unable to support iTSCOM’s aspirations for the types of services and offerings it wanted to launch to the market. Therefore, it decided it needed a billing and customer care solution that had the ability to consolidate all of the disparate systems to deliver a Tier 1 experience for its customers.

One requirement that iTSCOM needed was a solution that provided the flexibility to set up multiple types of services. With this, it could then provide true value-add and turnkey ease of the entire billing process to its future business interests, from provisioning and account activation to real-time charging, billing, customer care and invoicing, all accessed via the cloud. With such a converged billing solution, with its full suite of capabilities, iTSCOM can personalize each subscriber’s experience and differentiate it from its competitors through new innovative services and real-time cross-service promotions and bundles that it wants to deliver.
Operating in one of the most active markets in the world, service providers such as iTSCOM always need to be thinking about how it can grow new revenue streams. iTSCOM’s parent company signalled that wanted to expand into new areas such as security and financial services and launch Wi-Fi services in highly populated areas. Therefore, it needed to ensure that its billing solution was scalable and agile to fit these needs. Using a cloud-based solution, iTSCOM will be able to extend the new billing and CRM (Customer Relationship Management) capabilities beyond its cable company into these other business units and increase its efficiencies as well as provide a Tier 1 experience for its customers across the business.

In addition, iTSCOM sees Japan’s dynamic cable industry as another route where it can develop new revenue streams. Currently, there are around 350 cable service companies in Japan, 90% of these companies have less than 100,000 customers. iTSCOM sees a market opportunity to consolidate this market by taking advantage of cloud-based ASP (Application Service Provider) service model, and offer robust Billing and CRM system capabilities to companies that otherwise may not have the resources to invest in themselves. Therefore, iTSCOM’s investment in a next generation billing and customer care solution also needed to have the scalability and flexibility to support its aspirations to launch an ASP business model, elevate its multi-play cable service and the future support of its parent company’s multiple business interests – all on a single solution.
In closing, what multi-play operators need to understand is that significant benefits can be achieved when supporting converged service offerings. But to make this happen, operators need to address their business support systems to ensure they have the right tools in place. With the right billing system in place, operators can achieve better economies of scale, increased business intelligence, a better customer experience, and the ability to support new services and technologies not only for today, but into the future.

 

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