In order for this to happen, operators must view the “rating” and “charging” systems as the same – 3G success demands convergent systems with no boundaries or restrictions.“Unified Billing” holds the key to 3G profitability and the promise of enhanced customer financial management.
The challenges being faced by operators in rating and charging for 3G services are the same around the globe. After the financially aggressive 3G license competition, operators have been looking to 3G services to supply them with the crucial return on investment.
3G enabled handset manufacturers and the global media heavy weights are putting their might behind these new services leaving the operators to deal with the complexities of managing and delivering them. These challenges include ordering, authorization, user preferences, quality of service, supply management (i.e. digital rights, partner contracting) and financial control (i.e. credit limits, invoicing, balances, disputes, payments, financing plans, deposits and refunds). Growing customer requirements for greater financial control has resulted in a paradigm shift in operators' expectations from “billing” -- changing its role and purpose.
Like 3G networks themselves, the deployment of 3G services must be quick and agile, spontaneously adapting to subscriber requirements and buying habits. Agility required, operators to evolve their billing and customer care processes – unifying rating and charging, in order to provide one holistic view to the customer, and up-sell products directly to users' handsets. Billing becomes the unified financial management service that adds value and convenience to their subscribers' lives.
The evolution of rating and charging
Traditionally the “rating” and “charging” aspects of billing solutions have been treated as individual elements - both fulfilling separate functions that have required limited connectivity and joint communication.
This delivered adequate functionality for first generation communication services where the rating and charging of voice calls and SMS messages were straight forward for the consumer to understand, being based on familiar time durations and limits.
However 3G, with its new compelling content, demands rating to occur in “real time” and to price on many new dimensions that constantly change depending on usage, content, transactions and quality of service. Profitability and business success demand that this function work as one component within the overall 3G charging system, enabling the operator to utilise one single convergent customer database for spontaneous real time cross bundling opportunities, providing the customer with financial transparency and most importantly delivering an unsurpassed consumer experience.
Within the 3G world consumer experience will be king; the customers' financial relationship with the operator makes up a large part of this experience with rating and charging acting as its financial foundations.
Richer content + more subscribers + more transactions = more complexities
In reality, rating and charging are two sides of the same coin – both key functionalities of the entire “billing” process. Billing, for 3G should be defined as a provider of financial services to the customer, not a back-office collection and accounts receivable management process. Billing helps customers manage their finances.
Faced with the vast array of 3G services, all available at lightning fast speeds, consumer behaviour will inevitably change. Subscribers will demand to be treated as individuals and expect their operator to know their personal buying preferences as well is play an increasing role in the management of their finances -- flawlessly managing all of their prepaid, postpaid and ‘pay now' balances as one financial account -- all in real-time.
This is a tremendous opportunity for operators which can only be captured if they view their billing system as one unified customer financial management tool, helping them decrease customer churn and boost revenue by considering prepaid and postpaid as equals, both helping customers control debt and provide credit. When consumers use prepaid services, there is only an authorization against their balance, for postpaid customers there is an authorization against their credit limit. This means that Rating, Guiding, Discounting and Invoicing are services to be shared by all customers alike regardless of how they pay.
Billing – a customer financial management service
The demands on “Customer Financial Management” are growing in tandem with the number of new 3G services offered. Customers, facing an ever wider selection of “goods” that can be ordered and delivered instantly, are demanding that the operator provide them the same level of service that they get when they purchase traditional “hard goods” with credit cards. Such as secure authorisation, credit extensions, security, credit control, financial plans, loyalty schemes etc.
In reality, operators can provide a higher level of financial control to the customer than credit cards. For example -- Credit Control can be extended to what is consumed, when and by whom (for instance limiting the credit that can be extended to the children for gaming to a set amount in the evenings and none during the school day); Choice of payment from deposits (i.e. prepaid) to payment against extended credit (i.e. postpaid) to immediate payment for the same customer; Extension of special promotions such as buying minutes or bytes up front for a one off price and Extension of ways to earn discounts and bonuses that are commonplace in the credit card industry, but virtually unknown anywhere else.
The first consumers to reap the benefit of superior Customer Financial Management will be those customers with the greatest needs for financial control but with least capacity to do it themselves, such as families and small and medium enterprises (SMEs). For single individuals, managing their finances is as simple as setting a credit limit, paying a bill and making recharges. For a large corporation, dedicated teams review consumption and control telecommunications spend.
Families and small enterprises, like large corporations, must also control budgets and regulate spend – but they cannot afford to employ a team to do so. They need their operator to help them -- keeping teenagers from overspending on games and allowing delivery personnel to makes calls to the office on the company's bill but evening calls on their own prepaid balance.
With an ever wider assortment of goods driven and enabled by 3G and their associated diverse consumer spending and payment preferences – Customer Financial Management will become an ever more critical service for subscribers and a crucial differentiator for operators.
One true, real time view of the consumer
In addition, by using a convergent customer financial management system (“Billing”), operators can obtain the single holistic view of each subscriber – enabling them to track 3G buying habits and personal preferences and use this information for up-selling direct to individual handsets.
This allows services managed during the customer's lifecycle to be offered to customers as they actually consume – not just when they are off-line. For the operator, this means the opportunity to develop closer and more profitable 3G relationship with its customers. By having real time access to evolving customer profiles, operators can deliver value added services such as real time balances, self-service, profile management as well as offering discounting on services as similar goods are consumed (such as ring tones and concert tickets related to music downloads).
Creating the ultimate customer experience - the real challenge of 3G
For operators in the Middle East and Africa to make 3G a profitable success, they must concentrate their efforts on creating the ultimate customer experience – delivering compelling services at a high quality standard; treating all consumers as individuals and make paying for and using 3G communications as simple as possible.
Billing architectures – namely the separation of rating and charging – Billing architectures no longer makes sense with 3G. The operator can no longer rely on managing a single balance for a single user. This new always-on, real-time world requires the ability to handle multiple, concurrent transactions from one (the singleton), the SME or a group of users (the family) simultaneously. With this new dynamic, transactions will take on different characteristics, too.
3G transactions must be recognized at a very granular level, authorized, have credit limits checked, priced (both pre-and post-event), rated on a variety of dimensions and ultimately debited from a prepaid or postpaid (credit) balance. It is by utilising a convergent billing system for customer financial management with combined rating and charging systems, that the profitability of 3G can be realised and the true wealth of providing a superior customer experience can be harnessed.
About the author
Douglas Zone is Chief Technology Officer for CSG Systems, a global leader in billing and customer care solutions for next generation mobile, fixed wireline, cable television, direct broadcast satellite and advanced IP service markets.
Douglas joined CSG Systems in 2002, as Chief Technology Officer for EMEA and works with the region's leading operators to articulate CSG's technology and vision and serve as a key liaison to the company's product team in North America and other regions.
As CTO, Douglas has been concentrating his efforts on the development of CSG's flagship product – the CSG Kenan/BP billing platform. His in-depth expertise and knowledge in billing and customer care has led Zone to play a pivotal role in the development of CSG Kenan/BP as it has evolved to meet and exceed the technological demands of the operators.
Douglas also worked for CSG Systems (formerly Lucent Technologies/ Kenan Systems) from 1991 to 2000 holding a number of positions within the fields of project and programme management and consulting across the EMEA, APAC and CALA regions. He was then awarded the position of Head of Global Consulting Product Management where he managed technical, product and consultant teams.
Prior to this, he was the senior project manager at Maxbill Ltd, where he was responsible for project management, technical architecture, implementation and delivery of products as well as being involved in the pre-sales process.
Douglas holds a Master's of Science in Management, Operations Research and Finance from M.I.T. Sloan School ; a Master's Degree in International Trade and Finance and a Bachelor's Degree in Economics.
About CSG Systems
With worldwide headquarters in Englewood , Colo. , CSG Systems is a subsidiary of CSG Systems International, Inc. (NASDAQ: CSGS). CSG and its wholly-owned subsidiaries serve telecommunications service providers in more than 40 countries. CSG is a leader in next-generation billing and customer care solutions for the cable television, direct broadcast satellite, advanced IP services, next generation mobile, and fixed wireline markets. CSG's unique combination of proven and future-ready solutions, delivered in both outsourced and licensed formats, empowers its clients to deliver unparalleled customer service, improve operational efficiencies and rapidly bring new revenue-generating products to market. For more information, visit our website at www.csgsystems.com .
