Within the past two years, the number of national carriers in the U.S. has gone from six to four. Between Cingular Wireless L.L.C.’s acquisition of AT&T Wireless Services Inc. and Sprint Corp.’s acquisition of Nextel Communications Inc., the companies that need to have their customers billed for wireless services has been reduced in ranks.
At the same time, the carriers that have undergone the acquisitions now want to reduce the number of billing systems that have been inherited along with the acquisitions.
According to Jerry Brace, vice president of customer billing services for Sprint Nextel Corp., when the Sprint and Nextel brands merged, that meant about five billing systems on the wireless side, covering everything from content to prepaid to core wireless. The total doesn’t even begin to get into the 20-plus systems that supported billing on the wireline side. Billing company Amdocs Ltd. recently won out over competitor Convergys Corp. for Sprint Nextel’s business as a combined company. Amdocs also recently announced plans to acquire Qpass Inc. for $250 million; Qpass supports the content platform that Sprint brought with it into the merger.
Sprint Nextel execs have spoken eagerly of the company’s plan to roll out a dual-mode CDMA/iDEN handset this fall. One piece necessary for the handset launch is the ability to bill a customer for use of either network, and Brace said that the company is on track in its preparations for dual-mode billing as well as overall integration.
“We’re focused on the wireless integration first, for obvious reasons-that’s the bulk of our customers,” Brace said. He notes that Sprint Nextel will base its new integrated wireless billing system on the one used for the iDEN network. Of Sprint Nextel’s wireless customers, nearly 50 percent are on the iDEN network between the Nextel and Boost Mobile L.L.C. brands. CDMA billing capabilities are to be added to the iDEN platform, and then the customer migrations will start in a process that Sprint Nextel expects to take about 18 months.
“It is a huge process,” Brace said. “There are tens of thousands of customer care reps that are accessing our system every day, and then in sales, tens of thousands of sales reps and distribution channels [such as] Radio Shack [Corp.]. … They’re all touching that system.”
Brace said that Sprint Nextel is approaching the migration with the strategy of migrating simple consumer customers first, then moving up to customers with more complex billing arrangements such as business customers.
“We want to bite off something that is chewable,” Brace said. “In the past, conversions tried to target the most complicated customer base first, and that is a tough nut to crack.”
Brace also said that billing is a key component of Sprint Nextel’s strategy moving forward, and the company wants to stay ahead of the curve in its ability to bill for advanced services that aren’t yet available-so that the carrier doesn’t have to wait for new software to be developed and can speed its ability to get products to market.
Having a billing system friendly to mobile virtual network operators is another important element of the carrier’s multi-brand strategy, Brace said.
“We want to make it easy for them to do business with us,” Brace added. “In the past, it’s been difficult and that has been a barrier. It slows down the entrance to the market.”
While Sprint Nextel is currently concentrating its billing consolidation effort on wireless, Brace said the company also is examining its wireline billing-albeit on a slower timeline-and at eventually integrating the wireless and wireline systems as convergence becomes a bigger factor in the industry.
Verizon Wireless hasn’t undergone any recent mergers but has acquired a few small operators. Spokesperson Robin Nicol said that small purchases like that of Northern California operator Cal-One Cellular L.P. (17,000 customers) or Mid-Missouri Cellular (13,500 customers) pose no major problem for the carrier.
“When it comes to acquiring another company such as Cal-One, it’s really just a matter of converting those customers to your system. There’s no integration process,” Nicol said. She added that since Verizon Wireless regularly gains about half a million customers each month, putting another 17,000 or 18,000 customers into the system “is not a large-scale project.”
Cingular, meanwhile, is in the midst of billing conversions that it hopes to wrap up by the end of this year. The conversion would take the carrier down from four billing systems at the point of the AWS acquisition-Cingular’s two geographically based systems and two from AWS-back to two total, which is where the carrier wants to be, according to Pam Parisian, Cingular’s vice president of IT Integration. However, since AWS’ customers were billed on the basis of technology-one system for TDMA and one for GSM-Cingular actually has been dealing with three billing systems in most markets.
According to Parisian, Cingular already has about 90 percent of its customers on its end-state billing platforms, as subscribers have been migrated over as they’ve switched from AT&T Wireless handsets and plans to Cingular’s. Part of Cingular’s integrated billing system is expected to include a business-specific platform on a national scale that the carrier is currently in the midst of launching and will result in all of the carriers’ Business Markets Group customers being on one billing platform.
Parisian also said that one challenge has been trimming the number of IT applications since the merger, when the company had 566 applications between what products and services were offered by AWS and those offered by Cingular. More than 120 of those applications have since been retired, and Cingular wants to get down to around 300 in order to achieve the synergies that it has promised Wall Street.
“That’s a lot of decisions for the business to make as to how to consolidate all of the products and services, take the best, move forward and not have a lot of analysis paralysis,” Parisian said.
