NEW YORK-As the telecommunications marketplace expands, billing and customer-care companies are ramping up efforts to carve out niches and compete against each other for dominance.
“Fueled by changes in customer expectations, new technology and deregulation, the emergence of this group of companies as a force in telecommunications has been nothing short of extraordinary,” said Frank E. Baxter, chairman and chief executive officer of Jeffries & Co. Inc., Los Angeles.
As carriers try to increase customer satisfaction and new product and service introductions, the demand for sophisticated, outsourced billing services has increased dramatically, according to Jeffries. The investment bank held a conference late last month in New York featuring top executives of 18 billing and customer-care firms.
Calling party pays presents a unique opportunity in wireless, said Harvey Berg, president of OAN Services Inc. A recent Electronic Data Systems Corp. spin-off, the Northridge, Calif., company has focused primarily on serving wireline local exchange carriers.
Although he didn’t identify them, Berg said OAN is working with several cellular and local exchange carriers to implement calling party pays.
“We are getting mixed signals from the LEC community. Some see the opportunity. Others, if they bill for calling party pays, will do so unwillingly,” he said.
“We could end up with a patchwork of areas where there is and isn’t calling party pays.”
Providing large carriers prepaid wireless solutions that are “seamless with post-paid” is one of two key goals for Boston Communications Group, Woburn, Mass., said its chief executive officer, E.Y. Snowden, formerly head of Sprint Spectrum L.P.
Doing so requires a host of capabilities, not all of which are “true today for the [United States]: ” ease of use; the ability to send and receive calls; roaming capabilities; simplicity of implementation; independence from switches and handsets; convenient payment replenishment; and real-time billing to allow immediate service disconnect when paid airtime minutes are used up.
“We may have been the leader (in prepaid wireless) at the outset, but we know we have competitors,” Snowden said.
To help hone its competitive edge, Boston Communications also entered recently into a strategic alliance with SmarTalk, a wireline prepaid services company with 100,000 retail outlets. SmarTalk uses swipe-card technology to replenish the cash balances on prepaid calling cards.
“We want to be first with a wireline/wireless prepaid card. It is under development,” Snowden said.
Corsair Communications, Palo Alto, Calif., found its initial success with radio-frequency fingerprinting technology to reduce cloning fraud in analog cellular networks. Recognizing the need to move into the growing digital wireless telecommunications market was the reason it acquired Subscriber Computing Inc., Laguna Hills, Calif., said Martin Silver, Corsair’s chief executive officer.
Corsair also has devoted half of its research-and-development budget to a digital wireless telecommunications version of its PhoneTrack E-911 location product, which “we already had done for the military,” Silver said.
“We hope to have PhoneTrack done by the second half of 1999.”
Besides enhancing the ability of emergency services personnel to locate callers, “location products also permit an add-on to the billing software for location-based billing,” he said.
Despite the consensus for public consumption that digital wireless obviates the need for anti-cloning measures, Corsair’s Silver said, “Several carriers have asked us to develop a digital RF fingerprinting product.
“I’m not sure how much of a market there would be for this. It is unclear how and when cloners will figure out on a wide scale how to do digital cloning.”
LHS Group, Atlanta, looks at the telecommunications world and sees it moving to 4,700 carriers from 1,800 today, said Bruce T. Leonard, president and chief operating officer.
“We are dominant in the packaged software arena, especially for start-ups. But an increasing trend as we get into the middle is wrap-around customization, which is also proper for legacy system replacement-not a big bang but piece-by-piece migration.”
Besides product innovation, LHS sees acquisitions as key to its goal of world dominance in billing and customer care. Toward that end, it closed in June on the purchase of Info Cellular.
“Info Cellular is the first of what we’re looking at. We’re looking to grow faster than the sector,” Leonard said.
Leonard and Brad Houlberg, senior vice president for Alltel Information Services-Telecom, Atlanta, said that year-2000 compliance isn’t a problem for their systems.
Dominance also appears to be on AIS-Telecom’s agenda since Houlberg said his responsibility is to triple its revenues to $1 billion by the end of 2001, up from about $325 million today.
Based on the list of “key telecom clients” in wireless and wireline that Houlberg provided, AIS-Telecom’s focus, which takes a service-bureau tack, appears to be domestic. Its largest customer is GTE, and it handles 9 million wireless phone bills each month.
LHS Group’s billing software, which can be used across wireless technologies, is concentrated today in Global System for Mobile communications installations-120 of them altogether worldwide, Leonard said. The company derives 46 percent of its revenues from customers in Europe, 42 percent from the United States and 12 percent from Asia.
