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Friday, 6 November 2009

Are operators converging billing systems?

A few weeks ago, I wrote a piece about convergent billing, where I argued that there was not yet a real case in terms of customer features for convergence of prepaid and postpaid billing infrastructure (see ). Whilst I still doubt there are sufficiently sexy consumer products to be developed around payment convergence to be worth the painful journey to get there, I think it's time to review this position from a slightly different perspective.

I recently took part in a webinar on billing convergence, where the keynote speakers were from an American billing system supplier who should probably remain nameless. They were discussing why telecoms companies were moving towards convergence, mostly for reasons of convergence of service type (e.g. triple and quad play services) but also for convergence of payment type. I'm afraid I got distracted from the message by the unnecessary obfuscation of management Newspeak, culminating in a slide which gave the three key "Customer Experiences" as Real-time Policy Enforcement, Value-Centric Rating/Charging, and Proactive Contextualization. Now I have no real problem with the first two, but I spent some time distracted from the presentation trying to work out what on earth Proactive Contextualization might be, and failing. I know Americans love complicated jargon - I recall once seeing a weather forecast on American TV where the weather man announced gravely, "There will be a 50% probability of precipitation activity". Why didn't he just say, "It might rain"?

Anyway, the one interesting thing to come out of an otherwise disappointing webinar arose from the online audience survey. The first question was as follows (I paraphrase the wording):

What is the status of your strategy for convergence?

  • In place – 26%
  • Considering options – 52%
  • Understanding the problem – 22%
  • Not considered to be necessary – 0%

Particularly noteworthy I think that 74% of respondents are in the process of working out what to do to implement convergence, and that none consider it unnecessary. Now I think that service convergence is highly desirable, and would even argue that payment convergence is advantageous in terms of platform simplification and future flexibility. For me the issue is that whilst service convergence is going to be non-trivial programme, it is relatively speaking a like for like systems migration. Payment convergence, on the other hand, involves considerable architectural upheaval to marry the flexibility and capability of postpaid billing systems for rating, package building and discounting with the realtime capabilities of prepaid billing systems for event authorisation and balance management.

There is an interesting battleground developing in the software supply industry as to whether this comes about by extending the 'Billing' capabilities of the prepaid platform (essentially an IN-based solution) or by developing the realtime balance management capabilities of the postpaid platform (a traditional transaction-based solution). In either case, however, there is a platform architecture change and a major migration project attached, therefore with considerable accompanying risk. I'd be interested to know to what extent the webinar correspondents were answering this question as referring to both service and payment convergence.
Maybe the second question shed some light on this.

What is the biggest challenge you face:

  • Launching competitive price plans – 6%
  • Time to market – 28%
  • Churn – 18%
  • Reduction of complexity and Opex in IT – 47%

So almost half of respondents are dissatisfied with the state and cost of their IT to the extent that it is their biggest challenge. Clearly, a programme to rationalise their billing environment by converging all onto one platform would simplify that (and probably also significantly reduce the time-to-market problem). I suspect however that it will not be until there is a more robust economic recovery that companies will feel confident enough to initiate such a major programme.

I certainly look forward to getting involved in a programme of this sort in the not too distant future!