Subscriber billing keeps it simple

11 Aug 2016

When things go quiet in any telecoms industry sector it’s usually a sign that something is either dying or about to undergo an extreme makeover. But when it comes to BSS and billing in particular, it is more difficult to determine what’s really happening in the inner sanctum.

Of course, the software vendors will tell you things are great – and they probably are, for all the wrong reasons. Billing simply ain’t what it used to be. It’s no less important in its primary role of creating value from products and services – i.e. calculating a price, charging it and managing the money flow – but the issue is how long will it continue to play a central role.

The telecoms billing market grew, ostensibly, from the industry obsession to make everything as complicated as possible. It may not have been intentional, but the simple flat rate local phone call became perverted over time with the addition of charging for distance, length of call, time of day, subscriptions, bundles, etc.

This was not for the faint-hearted, and the early one-product billing systems that were created largely in-house gave way to the marvelous world of convergent billing and intricate complexity needed to cope with every possible billing scenario. These were the boom days for the new age billing vendors like Kenan Systems, Geneva, Kingston and Saville, to name a few. Where are they now?

Even the big names still going like Amdocs and CSG have diversified their portfolios so much that billing is only part of a much bigger picture.

The number of big billing projects, apart from those involving upgrades and transformations, are few and far between. The emphasis has been on real-time charging in recent times, and pre-paid customers dominate in many markets, obviating the need for billing per se.

But operators that have been around for a while are carrying legacy tariff plans, convoluted corporate accounts and complex pricing structures to manage bundles and discounts. So billing is and will remain critical for some time. However, senior management and stakeholders are become more reticent about investing heavily in them when they see newer competitors like MVNOs and digital service providers adopting much simpler subscription models.

A great example in France is Free!,which launched a €19.99 per month mobile plan (€15.99 if you are an existing internet customer) that gave customers unlimited national calls, unlimited international calls to fixed lines in 100 countries and unlimited data (with a speed reduction after 3 GB), plus free roaming in the European Union, United States, DOM, Canada, Israel, Australia, Norway and Iceland for 35 days each per year.

No wonder it decimated the market. After six months Free had 5.4% of market share, or 3.6 million clients. As the market was mostly saturated, those clients churned fromexisting mobile phone companies.By March this year that number had grown to 11.9 million. And yes, the pricing is attractive, but the sheer simplicity of Free’s billing is a joy to its customers. I know because I am one.

The one bright spot in the billing world seems to be ‘subscriber billing’ which, in principle, is as simple as it gets. Specialist subscription billers like Aria Systems and Zuora are garnering new customers weekly it seems, and there are many others – just Google “subscriber billing” and you’ll see.

Quoting from Zuora’s website: “At the heart of the Subscription Economy is the idea that customers are happier subscribing to the outcomes they want, when they want them, rather than purchasing a product with the burden of ownership.” When you see the success of services like Spotify, Microsoft 365 and countless other cloud-based digital operations, you can understand why subscription services appeal.

For customers, the monthly fees are spread out and manageable; for providers, they represent recurring revenues and a stickiness factor. Online service providers are looking for simple mechanisms to bill their customers yet be able to track their usage patterns for analysis and settlement purposes. Subscription billing working in hand-in-hand with big data analytics provides much the same intelligence as conventional telecoms billing but without the massive overheads and maintenance costs.

When you consider that many subscription billers are themselves cloud-based and sell their services as subscription models, you begin to see the full picture. Their customers like the simplicity as much as the end consumer.

The question is how long these models, or those pushing them, will last. When you realize the only competitive advantage is product pricing and customer service, it’s only a matter of time before some smart alec gets clever with complicated bundles, off-peak rates and discounts for certain customers that we will fall back into the world of complexity. Déjà-vu?

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