Beyond VoIP TMC

The Seven Laws of Converged Billing

February 20, 2007

I recently received an email from Redknee, a leading provider of infrastructure software that monetizes and personalizes services and content for mobile users, that listed the Seven Laws of Converged Billing. According to the company, these laws highlight how operators can use real-time, converged rating and billing to reduce churn and improve subscriber offerings.

The Seven Laws of Converged Billing includes best practices and tips for operators worldwide, as they seek to improve their offerings and reduce operational costs. I thought they were worth running in their entirety:

1. A Firm Foundation for the Future: The communications industry will be embarking on a transformation characterized by ubiquitous broadband access, mobility, and low power multimedia/computational capabilities. In the classic paradigm, the network operator had direct control over the entire value chain where a limited set of well defined services were offered from a "walled garden" and paid for via established pre/post paid account structures. The new paradigm will consist of fragmented and shifting value chains consisting of a wide variety of 3rd-party service/content providers, chronologically and demographically specific services, and a wide variety of payment mechanisms. The implementation of a carrier-grade real-time rating and charging platform that can accrue a charge on a transactional level independent of access technology (e.g. Triple-Play, Quad-Play, fixed-mobile convergence and WiMAX) while integrating with existing pre-IMS or IMS compliant infrastructure is critical to the long-term viability and success of wireless services and to the development and implementation of emerging data services.

2. Name Your Value-Based Price:  ­ A real-time rating platform creates new revenue streams with individualized rating plans that reflect the pricing requirements of individual geographic regions as well as specific demographic groups. Network operators require a robust and open infrastructure in order to offer innovative pricing plans. As wireless data networks expand to enable many different types of new services, network operators require the flexibility to price according to content type, events, time, location, traffic type, and delivered quality of service.

Next generation value added services are founded on value-based pricing models, and include new business models that subsidize or reallocate service costs to other entities (e.g. advertisers and sponsors). Value-based pricing must eliminate "double charging" for the use of transport as well as a given value added service. Value-based pricing must support context oriented mass customization where subscriber centric services will be rapidly generated and priced on demand according to the subscriber¹s preferences including whether the service should be subsidized by one or more sponsors.

3. Show Me the Money ­:  A heterogeneous rating architecture where independent rating silos are used for different services (e.g. IP vs. voice) or billing scenarios (e.g. prepaid vs. postpaid) results in inherent cost-prohibitive inefficiencies as well as a lack in a consistent service-rating model. A unified real-time rating architecture allows for: (i) the support of standardized rating, charging, billing and invoicing practices across markets and services; (ii) the support of streamlined processes that allows the automation of inputs into financial systems; and (iii) the improvement of fraud management through transaction traceability across the network operator¹s organization. In addition, customer care representatives and
subscribers can be provided with consistent and clear online presentation of invoices and transaction histories while eliminating administrative overhead and operational expenditures. Operators may be able to reduce ongoing operating expenses by up to 42 percent when they remove multiple legacy billing systems, in favor of a real-time platform.

4. Instant and Effortless Gratification:  ­ Real-time converged billing solutions allow network operators to activate and extend new services upon request as well as verify usage limits and view account balance status in real-time prior to providing a service. Operators can also complement the customer-relationship-management experience by proactively offering notifications of depleted account balances or incentives to encourage subscribers to top up their accounts before the funds run out. Cohesive and unified account structures provided by real-time converged billing solutions, as complemented by open APIs, enable network operators to easily provide a number of innovative capabilities including cross-bundling across technologies or services (e.g. combined wireless and wireline service plans), support of m-commerce services, and subscriber-centric promotions and loyalty programs.

5. You are Unique and Special! Mobile operators must attract new customers and retain existing ones with differentiated services and relevant pricing plans. To remain competitive, network providers must be able to differentiate their service offerings by delivering compelling features (e.g. rating based on delivered quality of service and location) and capabilities (e.g. access to groups of subscribers who share a given
characteristic) quickly and efficiently. Network operators that are able to deliver the best convenience and value will attract the best content providers and the most loyal and profitable customers. An operator¹s
ability to create and enhance value essentially consists of their ability to both distil and apply accumulated knowledge with respect to their customers.

This knowledge constitutes a key asset that can be monetized by providing suitably filtered information to third party content and service providers (e.g. to optimize offered mobile TV streams based on established patterns of behavior).

6. Prepaid ­ Postpaid -- Deal or No Deal? ­ The traditional siloed approach to deploying services will not sustain the next phase of user sophistication. Subscribers are not willing to accept a reduced suite of services in the context of acquiring a degree of cost control that is normally associated with pre-paid accounts. Concurrently, postpaid users have realized that they need better and more timely information to manage their spending on new services. As new services continue to proliferate and homegrown content becomes the norm, users want to have control and visibility over spend limits and service packages ­ and will want to explore other billing options including hybrid prepaid/postpaid accounts and pay per use options. Payment method is only a form of convenience!

7. The World is Flat: ­ Network operators are consolidating operations in order to stimulate revenues, increase operational efficiencies across access technologies, increase economies of scale, and to increase the market power of a given brand over a broader geographic region. Operators are also initiating and joining partnerships to collectively expand the reach of a common brand for the purpose of deriving similar benefits. A real-time convergent monetization solution must necessarily accommodate for the expanding reach of network operators as they seek to provide for consistent features and capabilities which are simultaneously adapted to meet local considerations (e.g. services and currencies that are specific to a given region).

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