Consumers and enterprises will soon be able to view their telecoms account balances for all services in real-time, irrespective of whether they are prepaid or postpaid customers – similar to the way bank account balances can be checked online today.
Real-time notification of all service costs, including voice, video, broadband and TV, will provide users with full visibility and control over all telecommunication costs, and virtually eliminate the risk of bill shock.
Delivered by advanced billing systems, these new services will have a major impact on the telecom industry. The implementation of new billing systems is essential if operators wish to secure revenue streams and manage credit risk, according to an Ericsson discussion paper released this week*.
Currently, customer data is distributed across many disparate systems within an operator’s network, thereby inhibiting achievement of true service convergence and limiting the ability to have a “single view” of each customer based on their entire set of services.
Operators are facing challenges with subscriber retention and growth, securing new revenues and increasing operating efficiency. Revenue leakage rates of between two and 11 percent are common throughout the global industry. In Australia, billing and payments issues topped the complaints list at the end of 2008, according to the Australian Telecommunications Industry Ombudsman.
Real-time convergent charging and billing systems provide a centralised service rating and accounting capability across all telecommunication services provided by an operator, including all pre-paid and postpaid services, in real-time. Customer benefits include spending control, payment flexibility through prepaid, postpaid or a combination of both, as well as maximising choice with the ability to mix and match individual services based on an individual’s requirements rather than being constrained by legacy billing system limitations.
“Real-time, convergent handling of end-to-end revenue management processes is vital to the success of current and future telecom operator business,” said Kursten Leins, Multimedia Strategy Manager, Ericsson Australia/NZ.
“The convergence of telecommunications services – including industry, network, service, prepaid/postpaid, and subscriber data – has not been paralleled by a convergence of charging and billing systems. A ‘single customer view’ is almost impossible due to the lack of common subscriber data across all the disparate systems.
“The growing range of multimedia services represents an opportunity to tap into new revenue streams. In order to realise them, however, operators need a single, convergent charging and billing solution — one that supports both prepaid and postpaid payment options for all user services, in real-time,” said Mr Leins.
For operators and service-providers, real-time convergent charging and billing solutions enable all subscribers and services to be handled the same way, independent of payment method (prepaid or postpaid) or access medium (fixed, mobile, broadband or TV). This not only reduces operating costs by eliminating the need for multiple, service-specific systems, it also helps with marketing of services through innovative packaging, rewards schemes, pricing and support.
Real-time charging enables operators to stem revenue leakage by controlling access to high-value services and limiting subscribers' spending to the credit they actually have in their accounts.
Real-time charging solutions also help operators reduce their exposure to credit risk in what is an increasingly complex service environment, in which revenues must be captured and shared between a growing number of partners – including media companies, Internet service providers and advertisers.
“Based on Ericsson’s experience in working with operators around the world, the only viable approach for an established operator to implement convergent charging and billing is by way of an iterative step-by-step transformation and migration process. Ericsson describes this as a ‘wheel of convergence’, with six stages,” said Mr Leins.
It is not just about new technologies – significant organisational change is required.
“The success of a major transformation project is dependent not only on technology and architecture; more importantly, it is the organisational engagement and broad cultural changes that are essential for people to own, drive and implement a successful transformation,” said Mr Leins.
By realising and leveraging convergent real-time charging capabilities, operators can gain significant competitive advantages in marketing their services, securing new revenue streams and improving their operating efficiency, thus meeting their key business objectives. To fulfil their business objectives, operators need to shift focus from highly-customised, service-specific billing and customer care systems and processes to a converged, customer-centric approach, where all operator charging and billing functions are centralised into a common framework.
* “The Wheel of Convergence: How operators can realise the benefits of real-time convergent charging and billing”, Ericsson Australia/NZ Discussion Paper, August 2009. Download the discussion paper here.
About Ericsson’s Revenue Management Solutions
Ericsson is a leading provider of revenue management solutions. Ericsson’s real-time charging solutions are the most widely deployed in telecom networks worldwide – catering for more than 750 million subscribers at over 155 operators. With more than 350 multi-mediation customers and more than 100 online mediation contracts, Ericsson is also the leading supplier of convergent online, event and file mediation solutions. IPX payments are available to more than 2 billion mobile subscribers in 24 countries.
More than 35 operators also base their convergent real-time charging offerings on an Ericsson charging solution. In the revenue management domain, Ericsson has integrated more than 1000 real time charging, convergence, prepaid, billing, payment, mediation, activation, revenue assurance and wholesale solutions.
About Ericsson
Ericsson is the world's leading provider of technology and services to telecom operators. The market leader in 2G and 3G mobile technologies, Ericsson supplies communications services and manages networks that serve more than 250 million subscribers. The company's portfolio comprises mobile and fixed network infrastructure, and broadband and multimedia solutions for operators, enterprises and developers. The Sony Ericsson joint venture provides consumers with feature-rich personal mobile devices.
Ericsson is advancing its vision of 'communication for all' through innovation, technology, and sustainable business solutions. Working in 175 countries, more than 70,000 employees generated revenue of USD 27 billion (SEK 209 billion) in 2008. Founded in 1876 and headquartered in Stockholm, Sweden, Ericsson is listed on OMX Nordic Exchange Stockholm and NASDAQ.
For more information, visit www.ericsson.com or www.ericsson.mobi
