Billing - The lynchpin of convergence

In the increasingly competitive European communications market, operators are under pressure to squeeze as much value out of their networks as possible. In practise, this means using their networks to provide a range of new services, including voice, data, video and Internet. But offering a range of independent services to an established customer base is of limited value. For an operator to really benefit from providing a suite of services, the ability to integrate them is crucial.

For example, providing the customer with a single, integrated bill for all its services can give providers extra flexibility and let them offer cross-service discounts. Steve Mason, European sales director at billing software company Daleen, defines convergent billing as 'the billing of multiple services in a single bill to one entity'.

Services such as fixed-line voice telephony, mobile telephony, and Internet service provision are, traditionally, billed separately. These services are now converging. 'As operators try and extend the value of the network, or increase the penetration to their customer-base with cross-selling or additional services, the demand is for billing system software to support and enable this convergence,' Mason says.

For true convergence, says Lucent Technologies' David Smith, there must only be one billing system for all services. 'If the service provider wants to offer gas and electricity on the same bill, or telephony and Internet access, or all four of those, it's driven across one single billing solution,' he says.

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Yet, while the word 'convergence' can be applied to the process of receiving one bill, it can equally apply to other billing environments. Portal Software's Stuart Potchinsky identifies several dimensions of convergence, including:

• Business convergence - where operators are able to offer prepaid and post-paid services from a single environment
• Systems convergence - where different systems like wholesale, retail, interconnect, prepaid and post-paid billing are brought together
• Network convergence - which brings broadband, mobile and utilities together, enabling services to be offered across multiple networks or multiple industries from a single platform
• Device convergence - where user devices like personal digital assistants become mobile phones, and vice versa.

'From a billing perspective, it's really important to understand each of these levels,' Potchinsky says.

Billing flexibility

Convergent billing can provide a number of advantages for service providers and their customers. Max Shone, marketing strategist at billing software company Convergys, points to several market drivers in the broadband sector, such as new technology, that enable different types of service to be offered.

Additionally, he says, 'There's a regulatory effect too, where operators are allowed to offer new services that they couldn't provide before. We have the unbundling of the local loop - with DSL coming on board - and incumbents are offering new levels of access for other operators to open up to their customers.'

Convergys considers billing as 'Active Revenue Management' (ARM), rather than just passive billing. 'We can take the billing system to a new level, where it's fundamental to the core business of service providers,' says Shone. 'We can maintain a single view of customers, so the operator can see what they're using, and how it can enhance that by offering a more interesting package.'

Daleen's Mason highlights economies of scale in operating costs, claiming that a convergent billing system can bring service providers a substantial return on investment. Moreover, he says, 'It can help create a unified, scaleable, and very flexible operational support system to allow any provider to react to market changes in demand.'

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'The true value to the service provider lies in being able to be creative around how services are presented,' says Smith of Lucent. 'If a provider offers cable services at the moment, and is launching some telephony services, it might want to offer some clever discounting spanning those services. Only true convergence allows you to do that.'

Smith emphasises the additional flexibility offered by convergent billing systems and, hence, lack of the need for a customised solution. 'It's simply about setting up a new service on the account,' he says. 'There's no big new development required to bring that service to market. You can launch something in hours, rather than days or weeks,' he says.

Do it yourself

Portal's Potchinsky says that most research indicates that customers will benefit from having a single bill. 'If I'm a user, and receive a bill with my utilities on it as well as my mobile and fixed-line calls, that's a good thing. I want to be able to call one person, and be able to get answers about everything,' he says.

An alternative to telephoning a customer service call centre is the relatively new phenomenon of 'self-care'. 'People want to get answers to their basic questions by themselves through the Web,' says Potchinsky. 'They want to be able to change their information online, query a line item on the bill, change personal data, or order or cancel services. That's a huge advantage for customers.'

The challenge for the service provider is to be able to provide all that information from a single location. 'You can't do that with multiple systems: you have to be able to bring them together,' he maintains. 'The service provider can then cut down on the number of its call centre representatives.'

Another advantage for service providers is being able to offer 'Friends and Family' type incentives - something Potchinsky refers to as 'cross-product discounting': that is, bundling services. 'You make a certain number of calls this month, and you can download X number of videos for free,' he says. 'You spent so much on your utilities bill, we're going to give you E16 worth of free calls next month.'

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Mason points out that, because Daleen's billing software engine is real-time, it offers 'electronic bill presentment and payment' and online account management. 'So you - the person on the street - can walk up to an Internet terminal, type in your details, and see your bill as it stands today, in as real-time as we can collect the information from the networks,' he says.

He continues: 'It will pull up your bill, allow you to look at it and do whatever you want with it,' says Mason. 'Then you can drop it down, and it'll be re-augmented into the database, ready for the actual bill to be produced. Both the end-user and customer service reps can do this.'

Satisfaction

So, are billing system companies responding to providers' needs? Shone emphasises that because Convergys's system is built from the bottom up to rate anything, it hasn't the baggage of being stuck in a telephony market. 'With legacy systems, there's often the lack of a road map, and they're not moving forward into next-generation billing spaces, which is where we certainly are,' he adds.

The first release of Portal's software came out in 1995. It is therefore a relatively modern design, yet a proven one, says Potchinsky. 'We have over 300 customers in the marketplace across many industries. We support ten languages out of the box, which is very important for our international growth.'

Mason emphasises the scalability of Daleen's billing system. 'We can go from a few to over 45 million subscribers,' he claims. 'All our customers need to understand and drive is a Web browser, which makes it very easy to use the system. And you can access it worldwide, with just one software installation.'

'We're finding that operators have to adapt and move, and get into new markets very quickly,' says Lucent's Smith. 'That's asking a lot of their IT systems, so the Lucent system plays exactly to those strengths. Any one of our customers can use the system for multiple services. It's simply a matter of setting up a new service on the system, and then launching it.'

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