Looking for a Next-Generation Telecom billing solution? What should you be looking for?
No Churn; No Burn!
Customer churn is the bane of telecom firms and the churn is most devastating to a service provider’s bottom line, when it occurs amongst high value customers. Most service providers helplessly watch as their best customers leave them to go to other service providers who promise better service, price or both.
For most service providers, their IT infrastructure and their pricing and billing systems in particular were designed in pseudo monopolistic environments where competition was low and customer loyalty was taken for granted.
Service providers did not see the need to put in place customer analytics tools, to analyze, categorize and determine customer churn factors. Not being able to identify valuable customer segments and their needs has made service providers blind to the motivations behind customer behavior. As a result, they don’t know what type of customer-service or price-discounting incentives it will take to retain their customers, specially their most valuable customers.
Furthermore, since most service providers embraced a one-size-fits-all pricing strategy, their existing pricing and billing systems are too rigid to support flexible pricing and discounting strategies tailored to the needs of each category of customers.
Loyalty Program – The Solution
Loyalty program is the most cost effective way to keep churn rates down and is essentially the best way for a service provider to identify and analyze the needs of their customer segments. The Loyalty Program also becomes the vehicle through which a competitively superior level of customer-service and pricing can be dispensed to each customer segment.
It's all about Relationships and MSOs have them already
The once cable service companies have now evolved into what is called Multi-Service Operator (MSO) who provide for all the communication needs of the customer – voice, video, data, and IP. But, this move has not put to rest the challenges for MSOs with satellite and wireline (telcos) operators making their inroads to become end-to-end service providers by bringing to market their own versions of double- and triple-play bundles. In short, the market is far from successful reposition of MSOs as the clear, best choice for video, Internet and voice services.
Retaining your customers is a lot less expensive than getting new ones. MSOs are probably best placed as far as ‘customer – ownership’ is concerned. MSO customers have always had longer associations with its providers, due to the region centric dominance of most of these cable service operators. A case in point could be North America, where MSOs enjoy high penetration amongst households – almost 70%.
Along with compelling traction for customer relationships the MSOs also have competitive network strengths to add – be it higher bandwidth for broadband access or be it its spectrum ownerships. Moreover MSOs are increasingly able to tie-up with mobile operators to give their content services through mobile devices as well.
The trick now is in ensuring that your customers keep coming back for more and more customers keep coming to you.
Go ahead, delight your customers, but don’t forget to bill them!
Pleasing the customer is a must, but making a profit and sharing an agreed portion of the same with partners and others in the service provider’s delivery chain is equally, if not more, important.
In their urge to provide VOD (and other Value-added Services), service providers today are losing substantial revenue streams as a result of ‘all-you-can-eat’ pricing, failure to accomplish content-value-based pricing and ineffective partner management systems. The fact is that there may be a difficult future for many of these operators sooner than later, if the current levels of losses continue.
Most industry pundits argue that the media and entertainment industry is at a critical inflection point with user base saturation setting in, and ARPU (Average Revenue per User) stagnating -- offering Value-added Services like VOD, in association with partners, is the only way forward. But, before making further advancements in providing customers with what they want to reduce churn, the most obvious needs to be put in place - a pricing and billing system that supports the kinds of billing situations (bill-per-use) that VOD presents.
Mobile Network Operators (MNOs) say, "Everyone's invited"
Thanks to MNOs, several product and service providers, including car manufacturers, insurance companies, banks, media players, systems integrators, healthcare organizations, etc., are able to offer connected intelligent devices to their customers. In most cases The customer is not aware who the service provider is. Again, in most cases, the customer doesn’t enter into a direct relationship with the MNO that carries the traffic.
In short, offering a connected world to its customers is not the business of Communication, Media and Entertainment service providers alone. It is soon becoming the business of all customer-owners in a world with a wide range of new, connected devices and applications, developed and delivered to market by innovative product companies and MNOs, in partnership with them.
This outcome requires significant evolution of the market as it is seen today, and is dependent upon a number of other developments -- for MNOs, pricing and billing in particular, because that is where the MNO earns its returns. Moreover, implementing these types of marketing and business models demands the required functionality and flexibility in business support systems, as well as the business processes and expertise.
IPTV - from the Operator's eye
For the end-user, IPTV is TV broadcasted digitally over IP to the user’s TV -- and not PC. Now, that is just one perspective.
From the view of the operator, IPTV is the opportunity to position themselves as a single source / service provider to their subscribers, wresting market share from the competing MSOs and wireless operators, hiking revenues and boosting margins. The primary objective is to achieve the Holy Grail of Communication, Media and entertainment – increased ARPU. Nonetheless, without true technical integration of the services (partner settlement included), the service providers can never come anywhere close to the Holy Grail.
Convergent billing platforms, in their prepaid and postpaid avatars, have been enabling operators to charge and manage customer balances on real-time, launch various new value-added services, manage account profiles and product catalogues, and last but not the least, bill customers as is the need of the time. Moreover, the ability to work as a single solution that supports the operators' various revenue sharing models for content providers, aggregators and network partners should be a given.
Every cloud has a silver lining!
The current economic climate has forced communication service providers (CSPs) to take a deeper look at their business models, and also at how they differentiate themselves from competitors. Offering cloud services seems to be the next big technological wave. Advantages of cloud services are many -- like, low-cost business systems, easy installation, low productivity lead-time and quick roll-out of services. Services on cloud also address the evolving needs of communication service providers, such as 'on-demand' and 'web-enabled', not to mention the increased 'datacenter efficiencies' and revenues from 'managed services'. The consequent cuts in operating costs and IT independence are only the appetizer benefits.
Having said this, moving to a cloud-based platform is not a cakewalk for most CSPs. It poses several challenges and concerns for service providers. Dealing with standards, security, performance, data compliance aligned with procedures and operations, and availability issues, on one hand, is a hurdle in itself. On the other, equally pertinent issues like pricing and billing that involves capabilities, such as Relationship-based Pricing, parameterized pricing and advanced pricing models – flat rates, tiered, bracketed and metered usage rates -- are awaiting a comprehensive resolution.
But these are just teething problems, and once addressed in the right manner, this cloud too has a silver lining.
All for One; One for All
Communication links are slated to become the backbone of every transaction in the next 8 to 10 years and the two entitles that will matter in such a paradigm are -customer owners and customers. Services like banking, logistics, utilities, etc., will be provided by this front-ending ‘customer owner’.
Communications, Media & Entertainment (CME) providers, essentially Telecom service providers, thanks to the position they enjoy in the industry, are uniquely placed to ride this wave of multiple industry convergence for their benefit. Communication providers are uniquely positioned to capitalize on this convergence wave because of their infinitely valuable billing database.
This data in combination with the right marketing platform and a versatile billing and partner settlement system will transform the communication media and entertainment industry into the sole ‘customer owner’ who is in a position to offer any service through its network, anywhere!
Cost Containment, Market Expansion and Optimization
At this point in time, you are probably finding yourself navigating around challenges within your business environment – economic and legislative – some of which are beyond your control.
Your best hope for higher profitability hinges on a three-pronged strategy of cost containment, market expansion, and an optimization of those conditions over which you do have control. This includes improving the management of customer relationships and experience to retain your existing customers, while reaching out to new ones.
Operators are looking for integrated ordering and customer management, billing and balance management, and revenue enablement, coupled with an extendible and flexible architecture.
NGOSS, or New Generation OSS, will be an answer for a comprehensive, integrated framework for developing, procuring and deploying operational and business support systems and software, available as a toolkit of industry-agreed specifications and guidelines that cover key business and technical areas.
NGOSS will be an enabler to achieve unprecedented levels of interoperability. With a totally new face of OSS/BSS to cope with, operators who haven’t already done so will have to upgrade their BSS/OSS infrastructure, and offer applications and services to make the customer’s life and work easier – anytime, anywhere.
Long live Telecom Billing!
There was a time, when you could pin-point your telecom service provider and clearly associate him with the (only) service he provided. Then came mergers, acquisitions and partnerships — and in those days, multiple billing systems addressed the same customer for different service needs. Nonetheless, in those times, the customer kept wondering, 'why such disjoint bills and why don‘t they see me as a single entity?'
Market evolutions, technology innovations and new business models descended and before you knew, the legacy systems gave up on the requirements of customers and service providers. And, then, telecom billing in its existing avatar was pronounced dead.
In its new avatar, telecom billing provides a consolidated customer view. The service provider sees the customer as ‘one’ and not as mere pieces of a puzzle. For elucidation, if we consider this post – renaissance system as a triangle, mediation, billing and partner management would form its vertices.
The system is capable of tracking the minutest record over multiple networks and technology, while seamlessly taking into its fold, an ever-expanding set of varied transactions, all the while producing timely and accurate bills, managing payments processing, and addressing all collection needs. Partner management for third-party services is inherent to such a billing system, as it handles diverse functions ranging from customer billing inquiries to customer loyalty strategies.