There's a lot of talk about the potential of mobile advertising, location-based services, and customized charging- and policy-based applications. While everyone speaks of the creation of personalized and distinct services through melding these types of services with social networks and mashups of data, no one seems to have a formula for monetizing these social phenomena. Most service providers start by struggling to embrace concepts like service delivery platforms (SDPs) and service-oriented architecture (SOA), which then trigger a struggle for justifying the services that would ride on top of these very expensive platforms.
Perhaps operators need to take an 'upside-down' approach to building new services. In particular, it seems the more mature markets' juggernauts may have something to learn from smaller, more agile companies that are allowing the energy of the market to drive them one way or the next.
For example, Virgin Mobile was the first to master 'peer-endorsed advertising' with its Sugar Mama program (where subscribers earn minutes for their monthly wireless bills by viewing advertising campaigns, surveys and other 'creative materials.') The company furthered its success with the next iteration of mobile advertising, called 'Fund my Phone,' where advertising spots from Sugar Mama are pushed to subscribers with Facebook accounts that wish to amass free mobile minutes. That then inspired Facebook to jump on that bandwagon by creating Beacon, an information sharing service that now boasts more than 44 third-party partner sites - all of which gather user information using JavaScript code and Facebook cookies to identify shared users and their behaviors - whether gaming with Kongegrate or watching movie reviews at Fandango, or purchasing items on eBay, and so on.
Is it possible that all service providers - whether prepaid, post-paid, content-driven or just simple text and SMS-driven - can learn from the simplicity of that model‾
KISS principle
Rather than build the platforms first with the goal of racing to participate in the sexier Web 2.0 services, operators might do better to build value adds on top of simple services that leverage existing real-time charging and billing capabilities. As they build on those simple services, perhaps there can be a natural evolution toward SDPs and SOA.
Some of the more agile and younger companies in emerging markets are succeeding by doing 'billing-based' services that leverage existing systems, thus avoiding the risk of spending on expensive network equipment to roll out services.
'Some are realizing that both billing and charging functions have significant business cases already associated with them,' says Telcordia's Graham Cobb, director of service delivery marketing. 'After all, that is where the money is, which means building services out from billing and charging systems just makes sense from the beginning.'
He maintains it might be better for some companies in certain markets, such as Brazil and parts of Asia where prepaid is a big part of their business, to think up ways to expand current prepaid billing and charging capabilities into services that attract new audiences.
For example, one Telcordia customer, Oi, has become the largest telecoms company in Brazil with more than 31 million customers and $14.5 billion in annual revenues. The company did not manage to do so by pioneering Web 2.0-type social services, but rather by layering new capabilities and services on top of its existing prepaid billing and charging systems.
By developing billing-based, value-add services, the company has managed to create loyalty and 'stickiness' without significant investment in 'platforms' to support new-age media services.
Starting with just the basics of prepaid voice and SMS, Oi managed to first put a new spin on 'topping up' that unexpectedly set it on a path to creating a fiercely loyal customer base. Using its prepaid/real-time charging engine, Oi created a 'loan' service for subscribers that it recognized would otherwise be lost if there were no money in their accounts at the time top-up was required. That seemingly simple realization has created a following of students and younger people, and the 30% interest Oi makes on top of the standard fees for the prepaid service doesn't hurt either. By simply allowing subscribers to ask for loans to keep voice and SMS services running even after funds run out, the company is making significantly more than it would had it forced people to wait for money before topping up their account.
Oi made it as easy as possible to ask for the loans by enabling people to ask for money to be forwarded to their accounts via text messaging or via Oi's web portal.
Real-time processes
Whether a company like Oi, which is 80% prepaid, or more of a balance of pre- and post-paid like most European and American operators, the next step is creating services that appeal to both prepaid and post-paid customers. Then, for example, there is room to launch creative discounting services and policy-based services that appeal to both types of customers. Loyalty can be built by something as simple as rewarding a post-paid customer who downloads two videos with 100 free text messages on a mobile phone.
Many European operators are accomplishing that type of loyalty by separating charging from billing, and centralizing customer information about usage, limits, account balances and usage counts in a real-time environment from which services evolve.
To separate charging from billing, there has to be a close evaluation of all the processes that touch charging and billing. That gives service providers an understanding of where customer data resides and how it can ultimately be made available through SDPs and OSS environments. That understanding opens the door for engaging customers with more personalized and customized services, such as policy-based, or parental control type applications.
'Operators have to think about how each service relies on certain processes, and even affects processes. They have to go beyond managing just the service interaction with the user, and onto managing subscriber data so that it's available in real time. Then there can be self-care applications as well,' adds Cobb.
Because real-time charging and billing require real-time processes, many vendors and service providers are evaluating how to map real-time charging and billing into traditional processes. That is evident in the work being done by Telcordia, Microsoft, Oracle, Ericsson and Amdocs in the TM Forum programs. In fact, recent discussions have revolved around the insertion of real-time charging processes into the Business Process Framework (eTOM) - a natural path after the recent success of putting a billing map into the new eTOM v. 8.0 map, which now incorporates new revenue management process detail. That has enhanced the 'billing' area of the eTOM - an area has now become the 'Billing and Revenue Management' section of the eTOM. It adds a new expanded definition of charging, and of the process definitions related to charging.