Is billing swimming for its life, treading water or simply sinking?

Written by on August 11, 2016 in Billing & Payments, Opinion with 8 Comments

Man drowning in a pile of shredded paperWhen 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. When it comes to BSS and billing, in particular, it is even 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 how long will it continue to play a central role is the issue.

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. 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; Saville – to name a few – where are they now?

Even those 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 those 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, MVNOs and digital service providers adopting much simpler subscription models.

A great example is Free! In France that 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 percent of market share, that is 3.6 million clients. As the market was mostly saturated, those clients left their previous 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 around ‘subscriber billing’ which, in principle, is as simple as it gets. Yet 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 will 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 factor in 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. A case of déjà-vu?

If ‘traditional billing’ was likened to a long distance swimmer, then subscription billing must be in the sprints. Either way, each has to keep swimming strongly, tread water or sink.

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About the Author

About the Author: Tony is a freelance writer, regular speaker, MC and chairman for the telecoms and digital services industries worldwide. He has founded and managed software and services companies, acts a market strategist and is now Editor of DisruptiveViews. In June 2011, Tony was recognized as one of the 25 most influential people in telecom software worldwide. .


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  1. James Messer says:

    The answer is that it is going to the cloud. Case in point, goTransverse’s usage-based cloud billing business is growing exponentially and much of the new business is coming from established global telecom carriers looking to launch nontraditional telecom services. They are specifically requesting an adjunct CLOUD-based billing and rating platform to handle new products and services and not be beholden to to their costly and slow legacy platforms. Many are very explicit in this request. If it’s not cloud, they aren’t invited to the dance and can’t compete.

  2. Martin Morgan says:

    Where are Kenan, Saville, Kingston and Geneva? Many marketing staff from these four companies made up the nucleus of the social side of the billing conference circuit of the 1990s. Anyway, the good news is (well at least for the founders) they all got bought over, and sold again, and again – mostly to equipment providers wanting to get into the billing market, and then back to OSS/ BSS companies. Kenan went through many owners before it looked like having a happy retirement at Comverse, whose BSS division was bought by Amdocs. Saville – bought by ADC, then Intec and now part of CSG. As for Kingston and Geneva – both became part of Convergsys and now reside somewhere in Netcracker. These billing innovators were all good companies at the time, and I’m sure some of their existing systems are still being used in telcos.

    • Tony Poulos says:

      Thanks Martin, you brought back some glorious memories of pure billing conferences in Paris, London, Istanbul, Rome and a host of other great locations. What heady days they were and what great people – you included! Maybe it’s time for a reunion complete with the Billing Band for the inevitable piss-up and dance party that was a feature of each event. Ah, those were the days…..

  3. Bob Machin says:

    I’m in!
    As Martin says, many of those existing systems are still being used in telcos, but I suspect that most are treated as legacy assets, supporting legacy business at the lowest possible cost and subject to minimal change and investment. They could run for years like that, either supported inhouse or farmed out to services organisations (or back to software vendors) to be run at half the cost.
    For new business, many telcos will indeed look to cloud vendors to providing simple charging at low cost and, as important, low risk. Why invest millions in bespoke systems for services whose success is highly uncertain, when you can make billing and charging an operating cost of those services?

    • Tony Poulos says:

      You raise an interesting point Bob. I wonder how long before legacy system suppliers tire of keeping their old software updated and running on old hardware that is no longer supported. Seems like a great business opportunity to offer operators a replacement cloud service except that most of those products, supposedly generic, had some customisation done on them to suit the customer. Any move would certainly be costly. And then there are those stubborn customers that simply would not agree to buying updates and now find themselves three or four releases behind.

  4. Bob Machin says:

    Damn those stubborn customers!
    A replacement outsourcing service is easier for suppliers to offer as genuine cloud billing solutions that can provide the flexibility that telcos still need (as opposed to subscription billing) seem thin on the ground. Take on the operational staff, take on the customer’s version complete with bespoke changes, upgrade/migrate over time to a cloud or more efficient solution while significantly reducing the cost to the operator overnight – which is the only meaningful value proposition – and somehow try to make a profit out of this…

  5. Sean McIlvin says:

    Great article Tony. I feel like treading water running 8 different legacy billing systems, one from the 1970s.
    And please no! I am not interested in any vendors, or anybody, calling in to tell me about how their wiz-bang cloud hosted solutions are waiting for me! We have a plan, but it is so complex and expensive, time consuming and sensitive, because we have to get it right for our customers and our shareholders!

    • Tony Poulos says:

      Hi Sean, great to hear from you, I can assure you that you are not alone. Must catch up next time I’m in Oz.

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