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When carrier billing shifts into cramming

As featured in DisruptiveViews

Many CSPs are now offering ‘carrier billing’ to third party content and digital service providers as a means of generating new revenues. What sounded like a perfectly logical business option has created some unforeseen issues that are costing some of them dearly.

For those lumbering with unwieldy legacy billings systems, many no longer being supported or upgraded, the simplest course of action has been to invest in new ‘adjunct’ systems to allow direct access to third parties. For others, it has meant a complete revamp and introduction of online, real-time charging systems.

For others, the mere concept of opening up their most sacred of kimonos – the core BSS systems – to outsiders is a sacrilege. They just don’t know how to let go of the crown jewels in case somebody works out how they have magically calculated prices for things like voice calls for so long.

The new content customers seem to prefer simple pricing of their services because their customers expect it. Everything either has a unit price or a subscription for usage. They keep things dead simple to avoid customers querying their bills – the bane of most CSPs over the last hundred years or so.

The big attraction to carrier billing is that content providers get access to the massive pre-paid customer market that CSPs have. Billing as a service is, for many, the cheapest way to monetize their wares and saves them having to set up their own accounting entities. The mantra for today’s start-ups is to get somebody else to do anything that is not core.

Apart from the occasional glitch in syncing delivery and charging, carrier billing is gaining popularity and generating new revenues – not only for the operators but also the providers of those systems mentioned above.

But the real issues, and the ones that make the press, are not to do with the service itself but its abuse – and not by customers but the very entities using carrier billing.

A good example is a recent case highlighted in the Singapore Straits Times of a SingTel customer who was billed for a third-party service he did not recall taking up. Nicholas Teo Eu Jin received an SMS stating that he had subscribed to content from a service provider called Buongiorno-Gamifive and would be charged S$24 monthly – commonly termed as ‘cramming.’ He assumed that the SMS was sent to him in error or was a hoax, and ignored it. First big mistake!

After receiving his bill with the charge on it he made a complaint to SingTel (of course) and was informed that he must have somehow signed up for the content by registering on the third-party service provider’s website, or by downloading a third-party application. As these services were offered by a third party, he was advised to seek clarification on the content services and charges directly from that service provider.

That all makes sense to an experienced and regular user of content and apps but Mr Tan felt the response was highly unsatisfactory, given that SingTel was the entity seeking to extract payment for the service. Are you seeing where this going?

Mr Tan did highlight that SingTel was prompt in its response, liaised with the service provider on his behalf to get the charge waived, and assisted him in activating a barring service to prevent him from incurring similar charges in future. But he is none the wiser about what he did that instigated the service in the first place.

So this story made headlines in Singapore and even though SingTel had done all it could to remedy the situation the perception remains that it was implicated simple because the charge appeared on its bill.

When you consider that websites can track our every movement and CSPs are jumping on the big data bandwagon to provide customer’s with a better ‘experience’ perhaps carrier billing as service should be accompanied by two-level authentication/confirmation and customer tracking.

The potential value of carrier billing can be easily undone with one or two billing ‘horror’ stories the press relish. It will also be difficult to explain to customers, as SingTel discovered, that even though the charge appears on its bill it is not responsible for it. Maybe the regulator will soon see a reason to step in and clarify the matter?

PS It seems Buongiorno-Gamifive has a long history of dubious conduct going back to 2012. You have to wonder what level of due diligence SingTel went through before accepting them as content provider and carrier billing customer.