Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
With the proliferation of mobile devices around the world, which includes the recent invasion of tablets, the number of mobile Web users has grown to 1.2 billion. Flash forward to the not-so-distant future and there will be more mobile devices browsing the Web than hardwired computers. These industry predictions are obvious, as evidenced by the usual throngs of early adopters who lined up this month to purchase the newly-launched, next-generation Apple iPad.
But the meteoric consumer demand for mobile gadgets, enhanced service offerings, faster data speeds, full-featured applications and the associated thirst for data, which is straining network capacity, is putting pressure on communications services providers – which encompass wireline, wireless and cable companies – to improve outdated billing practices. To retain existing customers and attract new ones, CSPs must provide a Web-like, real-time user experience to accommodate the increasing amount of time people spend online doing more things with more devices and merging content – like streaming video – across a mix of devices.
As CSPs actively revamp their businesses to respond to these trends, they must address shortcomings associated with legacy billing practices. For example, a recent Accenture survey found that 92% of executives believe their current billing systems are an impediment to launching new offers and nearly half said their existing billing systems pose a major barrier. Although the survey focused on CSPs in Europe, the Middle East, Africa and Latin America, we hear these same sentiments echoed by CSPs around the world. Clearly CSPs must rethink their billing systems to align with the demands of today’s communications environment.
In today’s environment, tech-savvy customers want everything fast and they want to be billed for services according to their usage instead of opting for “all-in-one” bundled offerings. They also want CSPs to be more proactive in providing high-quality services that are meaningful and marketed in a personalized manner with tariff suggestions that match the customer’s preferences and needs. In short, this new type of customer doesn’t always fit the prepaid or postpaid bandwidth subscriber. Accordingly, companies must be able to charge customers specifically for services and applications (by the minute or via a subscription, for instance).
Bundled services, data processing, present obstacles
The executives Accenture surveyed cited major concerns about billing for bundled services and having the right data volume processing capabilities. Our survey also found that current billing systems are falling short in terms of billing accuracy and the ability to process the volume of data typically generated with digital services. I am hearing these same concerns directly from our clients.
The bottom line is that CSPs must rapidly address these billing challenges or risk confusing and losing customers as a result of inaccurate bills that fail to meet their customers’ expectations.
Enhancing billing capabilities
Billing systems also must enable customers – any customer – to register online, select the options they want to purchase, activate their subscription, use the service immediately, and get information on the cost of the data or time they consumed. They also want to do this in real time and manage their account online. Unfortunately, many CSPs do not have the billing capabilities to handle these scenarios and new offerings, such as media services, may simply be too complex for these systems to handle. Thus, for CSPs to become providers of media services – which is essentially the competitive challenge these companies face today – barriers to cost-effective, accurate billing must be removed. For most, removing those barriers requires nothing short of a complete transformation of their billing operations – no small task indeed.
Keeping a lid on billing costs is also a major challenge for CSPs, especially as they work to transform their billing capabilities to keep pace with market demands. It’s encouraging to note that CSPs have experienced some success in this regard. However, CSPs know cost is an ongoing concern, and continually finding ways to reduce operating costs is critical to maintaining margins, especially as CSPs begin providing a broader range of products and services.
Convergent billing is key
Convergent billing and real-time rating are also areas that need to be addressed. Of course, becoming more customer-centric requires CSPs to step beyond traditional internal silos of service and provide customers one unified view of their account, regardless of what they purchase or how they pay.
Convergent billing not only enables companies to sell more and different services to all customers more efficiently, but it also improves the customer experience by making it easier for customers to see the services they have purchased on one bill. Moreover, it helps customers control their spending by providing flexible charging, spending controls and payment options and enabling customers to manage their entire household account online.
A billing system must be able to inform customers in real time how much their use of an application or service will cost them so they know what to expect. Yet, many CSPs have only made minor moves toward real-time rating by employing standalone “charging solutions,” as patches to their existing billing architecture to rate and potentially authorize access to specific services. These solutions are tactical rather than strategic. To be most effective, charging solutions should be part of a larger billing transformation road map that helps a CSP evolve into an end-to-end online media business.
For example, one European CSP needed to upgrade to an entirely new billing system that was flexible enough to support the launch of more services as well as billing and customer care processes. In particular, this telco, which now has the largest 3G network in its country, needed a billing system that could facilitate real-time convergent rating and charging. Since going live, the new system has enabled the carrier to launch and collect revenue from a variety of multimedia applications, and services accessible via mobile devices and supports nearly nine million customers.
Still, with consumer consumption across the digital spectrum at an-all time high, the question is how quickly CSPs can make the significant changes required to the products and services they offer customers, the ways in which they use their networks and the markets they serve. With this in mind, the three keys to transforming billing are enhancing and augmenting foundational billing capabilities; reducing the cost and complexity of billing platforms; and teaming with strategic partners to improve speed time to market.
All CSPs are under extreme pressure to introduce innovative, new services – in an environment of shrinking development and product launch times – because they know they can’t grow revenue by operating as a traditional communications business. The inevitable conclusion is simply this: CSPs that do not transform their billing capabilities to accommodate the new competitive and customer reality will become casualties as the digital content revolution enters its next phase. The time to rethink billing systems and design new infrastructure and processes that are attuned to the demands of today’s more competitive communication environment has arrived. By doing so, companies can improve responsiveness to customer expectations and help support the kind of real-time, convergent billing that today’s bundled, digital services require.
Jean-Marie Pierron is global billing lead, Accenture’s communications practice, Communications, Media & Technology group.
