Billing Definitions & Explanations

The move to IP was never a quiet revolution, it was disruptive, and as next generation networks are deployed, enormous pressure will come on to the ability of carriers and corporates to bill and re-bill for a complex bundle of converged services.

It shouldn’t matter whether you are using a landline, DSL, 2G, 3G cellular, wifi or WiMax, billing will become less about time and volume, or minutes and megabytes, and more about events. Whether you are a carrier an ISP, a corporate or further down the food chain, the new reality is that the old billing model is being retired, forcing some aggressive rethinking about the way business systems are structured over the next 5-10-years.

In the past carriers had different systems for voice and data, and fixed line and mobile, now the challenge is to have a single dashboard for customer care and operational management, with seamless links between the front and back-end systems.

The discerning customer no longer wants to be tied to a desk, they want the option of having calls follow them, whether its on a mobile phone or hot-desking to various locations where they may be for any length of time. More flexible payment methods will go beyond pre-paid and post-paid to types of customers such as families, companies or employees, business or consumer, corporate and government.

Then there’s unified billing for multiple service types, single billing for continuous services using multiple devices and of course the value-chain arrangements for wholesale, retail and emerging mobile virtual network operators (MVNOs). These may all extend to international roaming across competing networks and will certainly involve number portability.

Voice still makes up the bulk of revenue for carriers but it’s rapidly being commoditised. Already video is joining voice as part of the mainstream IP suite, and with music downloads and a host of business related services being offered, accurate and detailed billing is imperative.

Billable events

TelstraClear already treats video-on-demand and broadband access on its Christchurch and Wellington cable network as simply another event. Its billing systems are already moving away from call data records (CDR) based on the length of a call or particular data rate to xDRs which record events, whether it’s a movie, broadband, a phone call or something else.

TelstraClear is gearing up to simplify its internal systems by decommissioning its Mega billing system inherited from the Clear Communications days. By September 2006 it will have migrated to the more flexible Arbour CSG strategic billing platform. The expected benefits of one set of hardware and support services are streamlined internal processes, improved customer experience and the ability to launch new products in a timelier manner.

"Until the old box is turned off and physically rolled out of the building in December we’re not going to be able to get the full savings," says head of billing Sean Aitken. At that point TesltraClear will begin the upgrade from Arbour 9.1 to version 11.7 adding new features and improving bill presentation. "We’ll deliver a simplified one-page bill with much more detail available on-line to slice and dice based on time of day to determine the most expensive calls or most called locations, sites visited, downloads as well as call numbers and locations." This can be useful for determining calling trends, monitoring fraud and for re-charging.

Strategically he says billing will become less about minutes and more about the broadband pipe, and the variety of services delivered over that. That way it can focus on providing revenue assurance, fraud prevention and delivering IP-based services as events. "When we sign up key clients they’re not just buying telephones at a cheap price they’re buying the services of a provider who can help them manage their business and their telco spend and they typically have customised billing requirements including call benchmarking," says Atken.

The move to a single billing system will be invaluable, as TelstraClear refocuses on wholesaling capacity on its national fibre network and its cable in Wellington and Christchurch, rather than reselling services on Telecom’s network at low margins.

We are verging on an era where bandwidth is a commodity, and the emphasis shifts to applications and customer service. Telecom in New Zealand is fighting tooth and nail to hold back the rising tide, with its bid to prevent the Commerce Commission forcing it to provide higher speed broadband to TelstraClear, and then obviously to all ISPs, at a simplified payment rate. Once Telecom takes its foot off the hose, the floodgates will open on a raft of new services only being experimented with today.

Redefining the telco

Even the traditional definition of the telecommunications carrier is being eroded as wireline, fixed, mobile wireless and cable networks compete for market share. What we are seeing is the logical extension of the trend begun by internet service providers (ISP) and application service providers (ASPs) with the emergence of the communication service provider (CSP). And the future is all about customising bundled offerings, from basic voice and data to rich content and mobile services, along with quality of service (QoS) and improved customer care to maintain loyalty.

While contact centres and customer relationship management systems (CRMs) have attempted to achieve some level of this, convergence requires a much tighter integration. Argent Networks chief executive Chris Jones has been saying for years that billing is at the heart of the network. "Now we know it is. You can’t be competitive without a hot billing system."

He says billing used to be way down the food chain – an after-thought - and infrastructure was top of the heap. However in the past 18-months the cost of wireless and cellular infrastructure has been pulled down to between 50-75 percent of what it used to be. "It doesn’t matter whose kit you have at the back-end, it’s all standards-based anyway. The carriers are now seeing it as a commodity, but at the heart of things they still need to be able to drive it, which comes down to flexible billing and customer care. At the end of the day you need to get some money out of your subscribers."

The hard part for many carriers and businesses is migrating from old systems that just won’t cut it in the age of IP innovation and triple play services. "In the past carriers never kicked out billing systems. They need to bill for DSL, real-time video streaming, IPTV, authenticate people on a range of services and handle mediation. Most of the old systems can’t handle that," says Jones.

Bridging between the old and the new, to make the business case and the transition less painful, is something that BEA specialises in. It has the software, or IP middleware, that allows businesses to draw billing information from disparate systems into a single customer view. It accesses the data services layer of the network so customers can drill down and abstract details from an underlying database and repurpose it.

Modular swap out

David Jenkins, senior systems engineer BEA based in Melbourne says the billing model needs to be worked out before organisations head too far down the infrastructure track and recommends the more modular ‘services oriented infrastructure’ path. "We handle third party and external access to the network as an abstracted layer, providing the interface into billing and other services, including content charging frameworks, rather than talking to switches within a telcos network."

BEA’s main open systems approach works with a range of ‘next generation’ protocols including ParleyX (web services APIs for call control and messaging), IMS (Internet multimedia sub-system), .Net and Java J2EE to determine which is VoIP, video conferencing and other content-related traffic and ensure the revenue gets to the right place.

Lee Dalton, managing director, LogicaCMG’s telco division also specialises in a staged evolution for companies and carriers looking to move from legacy systems through to a single payment infrastructure. He believes this is far preferable to ‘rip-and-replace’ solutions, because it leverages the current investment in network and business services infrastructure.

A close coupling is developed between pre-paid and post-paid stacks, as the client moves gradually to a single management system, rating engine and tarrif creation environment.

That says Dalton, quickly turns a negative business case into a positive one. While operators typically want a solution that will deliver in 6-9 months and last at least five years, what they’re dealing with can change on a weekly basis. "Reconciling the two can be difficult unless all permutations are considered up front and that is far too complex to consider. That’s why staged evolution makes sense." LogicaCMG has over 40 off the shelf interfaces to help with this. Among its local customers are Vodafone New Zealand.

Its early days for the services-based market, and any billing system must easily integrate with existing processes. Simon Pincus vice president of product management at Intec Billing says problems with billing systems often stem from a failure to understand the interactions with business operations and processes. "Billing systems touch every part of an operator’s business, particularly mission critical areas, such as management of customers and revenue, so its essential implementation is smooth and low risk."

Pincus says customers rarely want to replace all systems at once. "Billing systems have a fairly long replacement cycle. They are certainly more flexible than a few years ago, and there is a much greater requirement for complex integration and less proprietary lock-in."

Intec Billing has both Telecom and Vodafone as its key customers. Its core product Singl.eView, supports most business models and converged services and has tools to help migrate legacy data. While it has predefined out-of-the-box solutions, most operators configure services to differentiate themselves, including the use of a web front end.

Accounting for complexity

The ultimate goal of converged billing is to streamline the settlement process and make sense of all the data generated, simplifying the settlement of invoices with wholesale and retail customers and seamlessly supporting any type of network traffic on a single platform.

Through the launch of next-generation services such as 3G, VoIP, MMS and IP video, there is enormous opportunity for carriers to generate additional interconnection revenue and build new partnerships with content providers and ISPs. Inadequate interconnect practices however can add up to serious money loss. Even established operators need to continually manage their interconnect partner agreements, whether this be for voice, mobile roaming, data, value-added services or content.

Telecom CIO Mark Ratcliffe says the unit cost of calls has fallen dramatically over the past decade. "When every toll call costs $2, $5 or $10 there’s a hell of a focus. When it’s only 10 or 20 cents people focus less." Telecom has had the ability to produce consolidated bills for about seven years and know the first thing customers want is to divide their account between those who have spent the money.

"They want a bill that they can break down according to their business. It is not about the things they purchase but about why they purchase them. The costs for data services go the CIO, mobile to the end cost centre manager, and often 0800 costs go to the call centre manager." Customers want a lot more from their billing, not only seeing at a glance what is going on but understanding it. "I think what they’re looking for is a way to analyse the cost. It’s not just about a consolidated bill but the richness of information they can get off the bill including who makes the call. They want to pay it quickly and that happens when they understand it, says Ratcliffe.

Now he says the trend is moving from understanding costs to controlling costs and customers want the bill to help with that, and most likely want a converged bill with detailed information can be easily disseminated to the people it relates to. "The future is electronic information that can be used for analysis," he says.

For example he says, if you know where the bulk of your calls come from, there are ways of configuring an 0800 national number to make it more affordable. "Billing systems are assets, and lifecycle leads you to change because infrastructure changes. Sometimes it’s because you are introducing new services, sometimes because you want to change the presentation layer to customers with internet billing." Telecom’s convergent real-time billing system is an Intec-eServGlobal installation.

Olivier Guibert, CSG Systems regional manager ANZ says, to achieve and sustain profitable growth, service providers have to either increase revenue or lower operating cost - or do both simultaneously. "By increasing the top line, service providers can more rapidly roll out new offers to attract more customers. The ability to understand customers and design offers that will help reduce customer churn, or more easily offer bundles, is critical."

Lowering operational expenditure is more easily achieved if the service provider relies on fewer business solution partners which removes complexity in the infrastructure and duplication. Also gone is the need for data synchronisation, external middleware and high latency between systems. Guibert says true convergence is not about interoperability. It is about having a single view of the customer activity across the full spectrum of offers and services, and doing this at the lowest cost of ownership possible.

Currently, CSG’s Kenan FX suite supplies critical services for approximately 200 million subscribers across Pay TV, fixed wire, wireless, and ecommerce service providers.  It includes CRM functions and self-care portal called TotalCare. New Zealand customers include Telecom and TestraClear.

Innovators ready for anything

And while the world market is going through some major changes with the top players in the billing market on the acquisition trail so they can continue to innovate the Kiwi DIY mentality remains alive and well.

Malcolm Dick, the managing director of CallPlus wrote the initial version of his billing system in Australia a decade ago and he and his team have continued to expand and develop it. BillPlus, and VisiBill the on-line customer-facing version, are seen as the major differentiator for the tolls and internet services business.

All provisioning of phone lines is activated electronically with a feed directly into Telecom or TelstraClear which is then reconciled through the CallPlus billing system which is ready for unbundling and deploying equipment onto Telecom’s network should the UBS scenario ever occur. Delivering of video on demand or any other service would simply require development staff to work on a new module

"We’ve set everything up so it’s end-to-end and our billing system is totally untouched by humans. In the end it means we can be lean and mean and move fast. If there’s something important, we can do it pretty much immediately rather than trying to get a software developer to fit us in and work from detailed design specifications. Ours is the only true real-time on-line system I know of," says Dick.

"We even built into it the possibility of billing electricity one day and continue to seriously look at this. Why should you get a separate bill for your power? Every time we launch a new product or project everything goes into the billing system, project management, control and operations."

For example the company’s running a couple of WiMax trials north of Auckland and developing a module to cover all ordering, provisioning and deployment of base stations and customer CPE equipment, including stock control. The system is fully computerised and seamless and in effect billing is a by-product of the overall project.

A client can set up an alarm and have a text message sent if a staff member is on a mobile phone for more than 20 minutes or it looks like the call is going to cost more than $5. "We have a huge set of management tools which save labour, processing, handling and assure accuracy in the processing of orders," he says.

When customers sign up for Slingshot they go on-line and set up their account, activate the service they want, get instructions by email, and are billed electronically. The system does it all. A customer may have an 0800 campaign and can see in real time how many calls they got, how many were missed and how quickly they were answered. "We designed everything into one super system. You couldn’t really buy that as a package."

Local billing developer Argent Networks, is limited with what it can do in the local market because of lack of competition, and consequently focuses most of its efforts offshore where the majority of its revenue comes from.

"The larger companies need to increase their market share but are being challenged by the smaller players who understand and can work with wifi, WiMax, wireless IP and packet-based billing," says Argent chief executive Chris Jones says. "The bigger players are snaffling up the innovators for their technology and agility, so they can truthfully say they have convergence, mediation, data warehousing and inventory management."

Colin Lynch, vice president of marketing with eServeGlobal agrees the industry is going through a major shape shifting process. For example just weeks ago Comverse purchased the billing business of CSG systems including Kenan/Arbor and ICMS billing systems for $US250 million. This is a major bet on convergent billing as previously Comverse was a low-end pre-paid player but with the acquisition can now position itself as a mainstream billing provider.

Until this deal, says Lynch all the ‘lower end pre-paid billing companies including Comverse, LogicaCMG, Tecnomen, Sigvalue, Lightbridge and Lucent had no story for real-time convergence, or leverage for the big deals where postpaid and sophisticated rating was essential.

And none of the tier one billing vendors such as Amdocs, Convergys, Intec or CSG had any capability of their own to address real-time billing and had to rely on partnerships to provide the network capability. Lynch believes there will be more such deals over the next 12 months.

Argent’s Jones says new generation billing systems need to mediate all the various forms of IP coming into the network. Each subscriber needs to be authenticated, and it’s no longer as simple as picking up CLI (call line identification). "You have to validate whether they’re a 3G, 2.5G subscriber or someone sitting on a wifi hot spot at Starbucks. You need a mediator to capture that information and bill for it in real-time and terminate that call when the customer has used up their balance."

Demand for content-based services will increasingly require real-time, event-based billing to sniff the packets, determine what activity the subscriber is engaged in and how to bill for it.

Ultimately Jones says growth will also be driven by competition. Already fixed networks are being eroded by ‘vanilla standard’ GSM, 2.5 and 3G offerings, free frequency operators including Wifi and WiMax and the more proprietary players in 4G, including Wired Country and Whoosh. "While they are eroding market share in the traditional wire-line area, consumers are also changing and demanding more bandwidth and more activity on their handsets."

Even the hybrids such as wideband CDMA, and wireless local loop are being redefined by the GSM Association as wireless carriers up against the fixed network space. "All of this has to be billed for in real time and presented via the internet, which means the back-end engines have to be real-time systems. It has to be as simple as ticking a box that says pre-paid or post-paid as an account type and dealing with one customer database that determines credit status."

Locally however he doesn’t believe the major carriers are being driven to innovation to the same degree as their international peers. "They don’t need to. The duopoly here means innovation is stymied unless they’re already planning to do it. They’re making so much money out of the mobile business why would they want this to erode their market share? It’s not a competitive market. They don’t want people to make phone calls from Starbucks over VoIP," says Jones.