Despite the prevalence of end-to-end billing systems as operators have consolidated in recent years, some companies may prefer a one-shot solution to a particular problem without the expense and effort of replacing an entire system.
According to Forrester Research senior analyst Michele Pelino, service providers might seek out a “best of breed” approach when they want to pick and choose among vendors for the best solution to address a particular billing issue, such as activation or real-time billing. Or, providers may simply not want to be tied to a single, end-to-end vendor for billing and OSS solutions due to the inherently weaker negotiating position.
“In some cases, they also have some of those pieces of the puzzle in place, so using that end-to-end system isn’t what they want to do. They’re trying to fill in gaps in functionality or capability that they need to support new types of services to broaden their capability,” said Pelino.
Companies such as Highdeal Inc. offer those types of pieces-and-parts to service providers, counting among its clients Canadian telco Videotron, content management company Motricity Inc. and more than 170 implementations of its services in 50 countries.
Topsy-turvy
In the past five years, “It’s becoming increasingly obvious that the reality is that the mobile market is getting turned upside down, with voice margins falling and data services becoming much more prominent-and with those data services, much more of the value chain involves third parties bringing services to the market,” said David McNierney, vice president of market development for the Americas at Highdeal.
The change has put stress on back-office systems, he added, and billing vendors with end-to-end systems have become “a jack of all trades, master of none.” The pressure toward convergence also has contributed to the need for more agile and adaptable billing components, McNierney said, and so companies such as Highdeal are stepping forth with alternatives to the end-to-end.
Kip Turco, Motricity’s senior vice president of engineering and operations, said that his company had existing back-office operations, but adding the Highdeal component made things easier to manage and more operationally efficient.
As the company has experienced what Turco called “exponential growth,” he said the Highdeal piece of the company’s billing system has helped automate the application of contracts, such as revenue sharing; made adding customers and new contracts easier; and provided a clear and simple audit trail.
“Once you have something that automates the contract and how you pay things, it kind of points to some efficiency that can be gained by changing a process or putting a process in place,” Turco said. He agreed that billing has become substantially more complicated in the past few years, with more parties involved in the food chain and the necessary infrastructure to handle the differences in billing and settling payments for content such as mobile games versus ringtones, for example.
New pieces, more challenges
As IMS evolves into an active part of wireless billing systems, the architecture offers the promise that service providers will essentially be able to choose multiple pieces of billing with plug-and-play capabilities as the underlying architecture should allow seamless integration. McNierney said that Highdeal believes IMS will be key to the evolution of billing systems. However, whether things will actually play out that way remains to be seen, since companies will likely implement IMS differently.
Still, as David Sharpley, vice president of marketing and alliances at Oracle noted, the larger trend for consolidation among operators has meant that large carriers generally are looking to simplify their billing systems-but he added, there are instances where the company has provided just mediation, rating or bill presentation products for companies.
“I think the general trend is to simplify, but some operators have their own approach to these things and have systems that they prefer for certain tasks, and we see that in the market,” Sharpley said.
Some of the challenges that smaller companies face when trying to compete in the billing space, Pelino said, include proving themselves to be a steady supplier and not a fly-by-night operation without long-term stability-a potential credibility question that larger billing vendors don’t have to deal with. Vendors need to keep current with IMS trends, which operators expect, as well as convince carriers of their ability to scale and provide reliable service, Pelino said.
“We’re seeing more of a move to end-to-end, but that doesn’t mean the pieces of the puzzle aren’t important,” Pelino added. “Carriers are not going to take out what they have in place. They’ll transition over time to more of an end-to-end system, and in the meantime the pieces that they need, they’re going to have to fill in.”
