Introduction to Telecom Billing

Avi Ofrane, Harte, Lawrence

Excerpted From:

Introduction To Telecom Systems

Mr. Harte is the president of Althos, an expert information provider covering the communications industry. He has over 29 years of technology analysis, development, imple-mentation, and business management experience. Mr. Harte has worked for leading companies including Ericsson/General Electric, Audiovox/Toshiba and Westinghouse and consulted for hundreds of other compa-nies. Mr. Harte continually researches, analyzes, and tests new communication technologies, applications, and ser-vices. He has authored over 30 books on telecommunications technologies on topics including Wireless Mobile, Data Communications, VoIP, Broadband, Prepaid Services, and Communications Billing. Mr. Harte’s holds many degrees and certificates include an Executive MBA from Wake Forest University (1995) and a BSET from the University of the State of New York, (1990). Mr. Harte can be contacted at [email protected]

Avi Ofrane founded the Billing College in 1996, a training company addressing the converging market trends associ-ated with telecommunications Billing and Customer Care. The Billing College is a spin-off company of Mr. Ofrane's technology consulting company, Jupiter Data, Inc., estab-lished in 1990. Mr. Ofrane began his career in 1977 as an analyst with the IBM Corporation and has since 1982 con-centrated exclusively on the telecommunications industry, in which he is now a recognized expert in Billing and Customer Care. Throughout his extensive career, Mr. Ofrane has been involved in all aspects of the industry, from strategic planning and execu-tive management to vendor evaluation and project implementation. Mr. Ofrane lectures extensively on Billing and Customer Care issues, strategies, methodologies, and practices. He is a frequently requested speaker at major North American and European conferences. Mr. Ofrane is currently President and CEO of the Billing College, as well as a master instructor of the company's courses. Mr. Ofrane is the co-author of the book "Telecom Made Simple" and has written numerous articles for international trade publications. Mr. Ofrane holds a Bachelor of Science in Computer Science from Pennsylvania State University.

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Table of Contents

BILLING AND CUSTOMER CARE . . . 1

I

B

. . . 3

Types of Services . . . .4

Standard Billing Process . . . .4

Real Time Billing . . . .6

Multilingual Support . . . .8

Multiple Currencies . . . .8

Inter-carrier Settlements . . . .8

B

P

. . . 9

Event Sources and Tracking . . . .9

Mediation Devices . . . .10

Call Detail Records (CDRs) . . . .11

M

B

F

. . . 13

The Rating Engine: Processing the Usage . . . .13

The Invoicing Engine: Month-End Processing . . . .15

Clearinghouse . . . .17

Invoices . . . .18

Management Reporting . . . .19

Invoicing . . . .19

Processing Payments . . . .19

Posting to the Financial System . . . .20

C

R

M

(CRM) . . . 20

Account Activation . . . .21

B

S

C

. . . 22

Hardware and Software . . . .22

Billing Cycles (Batching) . . . .22

Bill Printing and Mailing . . . .22

Call Center . . . .23

Collections . . . .24

B

S

. . . 25

Exchange Message Record (EMR) . . . .26

Automatic Message Accounting (AMA) . . . .26

Carrier Inter-exchange Billing Exchange Record (CIBER) . . . .26

Transferred Accounting Procedure (TAP) . . . .27

Network Data Management – Usage (NDM-U) . . . .28

Interim Standard 124 (IS-124) . . . .28

T

F

B

C

C

. . . 28

Applications Service Providers (ASPs) . . . .28

Local Number Portability (LNP) . . . .29

Billing and custom care systems convert the bits and bytes of digital infor-mation within a network into the money that will be received by the service provider. To accomplish this, these systems provide account activation and tracking, service feature selection, selection of billing rates for specific calls, invoice creation, payment entry and management of communication with the customer.

Billing and customer care systems are the link between end users and the telecommunications service provider. Telecommunications service providers manage and setup the networks to allow customers to communicate (provi-sioning), and bill end users for their use of the system. Customers who need telecommunication services select carriers by evaluating service and equip-ment costs, reviewing the reliability of the network, and comparing how spe-cific services (features) match their communication needs. Because most network operations have access to systems with the same technology, Because most Telecommunications Service Providers offer essentially the same types of services and network facilities, Billing & Customer Care are becoming key differentiating factors and play a critical role in the cus-tomer’s carrier selection decision.

There are many different types of services to be supplied and billed. These include traditional voice and data communications, short messaging, fax, and information services. The billing process involves receiving Usage Detail Records (UDR) from various network elements, determining the billing rates associated with each UDR, calculating its charge, aggregating

the records periodically to produce invoices, sending invoices to the cus-tomer, and recording (“posting”) payments received from the customer. Customer care systems, sometimes known as provisioning systems, are tools that assist the Customer Service Representatives (CSR) in their communi-cation with customers.

Billing system costs can “eat up” a substantial percentage of revenues col-lected. In addition to the initial acquisition cost of computers and software, operational costs tend to be very high. Of the service provider’s staff, typi-cally 20%-30% are directly or indirectly engaged in providing billing and customer care support.

There are many billing standards that have been developed for telecommu-nications networks. Because the services offered by different types of net-work operators (e.g. cable television compared to local telephone companies) are beginning to overlap, billing standards are also converging.

Future trends and challenges for billing systems include the proliferation of new types of services to support, telephone number portability that compli-cates account identification, and increased customer self care to reduce the burden (and cost) of billing systems.

Figure 1.1 shows an overview of a billing and customer care system. This diagram shows the key steps for billing systems. First, the network records events that contain usage information (for example, connection time) that is related to a specific call. Next, these events are combined and reformatted into a single call detail record (CDR). Because these events only contain network usage information, the identity of the user must be matched (guid-ed) to the call detail record and the charging rate for the call must be deter-mined. After the total charge for the call is calculated using the charging rate, the billing record is updated and is sent to a bill pool (list of ready-to-bill call records). Periodically, a ready-to-bill is produced for the customer and as payments are received, they are recorded (posted) to the customer’s account.

Introduction to Billing

The control of a billing system is usually under the finance department. Billing systems are often viewed as accounts receivable as the billing system assists in the collection (receipt) of money from customers. Billing systems are also part of accounts payable (for inter-carrier settlements) as customers often use services from other companies such as wireless roaming, long dis-tance, and call completion through other networks. The network operator is usually financially responsible for services provided to its customers by other networks regardless of whether or not the customer pays for the ser-vice.

Figure 1.1, Billing and Customer Care System

Types of Services

There types of services that a customer may use in a network include net-work access (basic information transfer), voice and data services over fixed line and mobile networks, Internet Protocol (IP) service (such as email), and content delivery (current traffic information for example). When the com-munication service involves system access through different networks, the event is normally routed through a toll center and a toll charge may apply. A toll is any message telecommunications charge for services provided beyond a local calling area.

Examples of system access services include Plain Old Telephone Service (POTS), Integrated Services Digital Network (ISDN), Digital Subscriber Line (DSL), and other data connectivity services that transfer information between points. Information processing services include prepaid or postpaid phone card (Telecard), voice mail, fax (store and forward), and other services that involve the processing of information passing between two or more points. Content delivery involves linking customers to sources of informa-tion content and transferring the content to the end customer. Examples of content delivery include weather advisory services, stock quotes, and the delivery of other sources of information that the customer requests.

Standard Billing Process

The typical billing process involves collecting usage information from net-work equipment (such as switches), formatting the usage information into records that a billing system can understand, transferring these records to a Rating Engine, that assigns charges to each record, receiving and record-ing payments from the customers, and creatrecord-ing invoices.

Figure 1.2 shows a standard Billing and Customer Care process. In this dia-gram, the customer interacts with Customer Care or works with an activa-tion agent to establish a new wireless account. The agent (CSR) enters the customer’s service preferences into the system, checks for credit worthiness, and provides the customer with a phone number so that the customer may

make and receive calls through the mobile telephone network. As the cus-tomer makes calls, the connections made by the network (such as switches) create Usage Detail Records (UDR) of the activities. These UDRs include the identification of the customer and other information relevant to the billing system. The billing system also receives records from other carriers (such as a long distance service provider, or roaming partners). The billing system then reformats the UDRs into an internal layout that is proprietary to the carrier, guides and updates the UDRs with correct customer and rat-ing information. After each UDR has been rated accordrat-ing to the customer’s rate plan, it is stored in a “Bill Pool”. The Bill Pool is a data store contain-ing all UDRs that have been rated and are waitcontain-ing for the month-end cycle billing process to aggregate them and display them on a customer’s bill.

Figure 1.2, Standard Billing Process

The customer then sends his payment to the telecom service provider. Payments are recorded (posted) in the financial system. Customer’s bills are archived in “Billing History” files. These files are used heavily by vari-ous organizations within the enterprise: Customer Care (inquiries, adjust-ments, service order, etc.), Marketing (product analysis), Finance (revenue management, revenue projections, profitability, etc.), Audit, and Revenue Assurance.

Real Time Billing

Real time billing involves the authenticating, authorizing, accounting, infor-mation gathering, rating, and posting either at the time of service request or within a short time after the event has been initiated (this actually may be several minutes in “near real time” billing). Real time billing is primar-ily used for prepaid services such as calling cards or prepaid wireless. Many real-time billing systems use Remote Access Dial In User Server (RADIUS) to limit access to the system to registered and authorized cus-tomers. RADIUS is network protocol that operates on a network server (software program and database); it receives identification information from a potential user of a network service, authenticates the identity of the user, validates the authorization to use the requested service, and creates event information for accounting purposes.

Real time billing may also provide for better customer care and Provide Advice Of Charge (AOC) information. AOC provides the ability of a telecommunications system to advise of the actual costs of telecommunica-tions event either prior to or after the occurrence of the event. For some sys-tems, (such as a mobile phone system) the AOC feature is delivered by Short Message Service (SMS).

Figure 1.3 shows a real time prepaid billing system. This diagram shows that the customer initiates a call to a prepaid switching gateway. The gate-way gathers the account information by either prompting the user or by querying the incoming call for an Id (e.g. prepaid wireless telephone

num-ber). The gateway sends the account information (dialed digits and account number) to the real time rating system. The real time rating system identi-fies the correct rate table (e.g. peak time or off peak time) and determines the account’s remaining balance. Using the rate information, the call desti-nation, and balance available, the real time rating system calculates the maximum allowable duration for the call. . This information is sent back to the gateway and the gateway completes (connects) the call. While the call is in progress, the gateway maintains a timer so the caller cannot exceed the maximum amount of time. After the call is complete (either caller hangs up), the gateway sends a message to the real time rating system that con-taining the actual amount of time that was used. The real time rating sys-tem uses the time and rate information to calculate the actual charge for the call. The system then updates the account balance (decreased by the charge for the call).

Multilingual Support

Multilingual support involves providing invoices and customer care services in multiple languages. There is a growing trend to aggressively seek multi-national customers and it is becoming crucial for the billing system to invoice customers in their chosen languages. Multilingual support may also be required by government regulations. Customer service representatives (CSRs) with multiple language skills should be available to communicate with customers. Some of the key challenges associated with supporting multiple languages include single-byte versus double-byte character set support, invoice design, equipment compatibility (printers, monitors, key-boards, etc.), and software drivers.

Multiple Currencies

Multiple currencies used in different countries can complicate the billing system as the billing and customer care system must be capable of record-ing and processrecord-ing in units of multiple currencies. Multinational companies will most likely process in multiple currencies. Some of the complications of multiple currencies include: rounding rules, significant digits, timing of rate conversion, payments made erroneously in a different currency, and rapid changes in exchange rates.

Inter-carrier Settlements

Inter-carrier settlements are the sharing of revenue between carriers that provide services to each other’s customers. Because hundreds of carriers may be providing services with each other, inter-carrier settlements are often provided on a wholesale basis between network operators based on prearranged agreements between the carriers. In the United States, inter-carrier settlements are enabled through the use of inter-carrier access billing sys-tem (CABS) or independent clearinghouses.

Inter-carrier settlements are becoming more complicated with deregulation. To encourage fair competition, some governments are requiring existing (incumbent) telecommunication companies to unbundle their network ele-ments (UNE). Unbundling is the process of separating portions of a telecommunication network that are owned or operated by a service provider. It is a common term used to describe the separation of standard telephone equipment and services to allow competing telephone service providers to gain fair access to parts of incumbent telephone company sys-tems. An example of an unbundled service is for the incumbent phone com-pany to lease access to the copper wire line that connects an end user to the local telephone company (Local Loop). The competing company may install high-speed data modems (such as ADSL) on the copper line to enhancing the value of the telecommunications service.

Billing Process

Billing systems have software and optional hardware components that receive UDRs from various network elements, validate them, rate them, and aggregate them into an invoice that is sent to the customer. Events may be received from many sources such as: a switch, a data router, a gateway, a clearinghouse, or an Application Service Provider (ASP); consequently they must be converted into a standard format that is recognizable by the carri-er’s internal processes (including billing).

Billing and customer care systems may be developed and managed by inter-nal staff or contracted to other companies (outsourced). Companies that provide complete managed billing and/or customer care services (called turnkey) to other companies are called service bureaus.

Event Sources and Tracking

Billing system events are measures of network usage. Events can be stored in the network device (Data Collector) for transfer at predetermined time intervals, when a specific value has been reached (event trigger) or when the billing system requests the information (called polling).

Some common event sources include central office switches, routers, and application servers. Central office switches are devices that route calls from one subscriber to another. They track the time one port is connected to another port. Routers are intelligent switches that forward packets toward their destination based on their routing address (and possibly type of con-tent). Routers can track the amount of data that is routed between two ports over a period of time. Application servers are computers that process information at the request of a customer (called a client), and can track the beginning (launching) and termination of an application.

Mediation Devices

A mediation device receives, processes, and reformats event information in a telecommunications network to a suitable format for one or more billing and customer care systems. This processed information is either continu-ously or periodically sent to the billing system. Mediation devices are com-monly used for billing and customer care systems as these devices can take non-standard proprietary information from switches and other network equipment and reformat them into messages billing systems can under-stand.

Switches usually record usage information (e.g., switch connection time) in Binary Coded Decimal (BCD) format and these record formats are often pro-prietary to the manufacturer of the switch. Each record may be variable length and several events (e.g. switch points) may be recorded in the same system for a single call. There are at least 60 switch manufacturers and each has several models of switches that may result in different billing record formats.

There are other network parts or devices that may be involved with con-necting a call or providing Value Added Services (VAS). These devices also can produce cal detail records and these records are in a different format. Figure 1.4 shows a mediation system that takes call detail records from sev-eral different switches and reformats them into standard call detail records that are sent to the billing system. This diagram shows that the mediation

three different switch manufacturers. The mediation device converts these formats into a standard Call Detail Record (CDR) format that can be used by the billing system.

Call Detail Records (CDRs)

Billing information regarding specific calls is contained in Call Detail Records. (CDRs) and includes: origination and destination address of a call (who), time of day the call was connected and duration of the call (when), the call type and its details (what), the connection location(s) of the call (where), and the cause of event recording (why). As not all events are voice or data “calls”, the record generated by the network element is often referred to as

“Usage Detail Record (UDR)” and often contains non-telephony billing infor-mation such as: a downloaded movie, or IP content.

Figure 1.5 shows the basic structure of a call detail record. This diagram shows that a UDR contains a unique identification number, the originator of the call, the called number, the start and end time of the call. This dia-gram also shows an additional charge for operator assistance and that a UDR dynamically grows as more relevant information becomes available.

Major Billing Functions

Typically there are two major components to Billing systems: the Rating Engine (sometimes known as “front-end”) and the Invoicing Engine (some-times known as “back end”, “Cycle Billing”, or “Month-End Process”). The Rating Engine accepts UDRs from a service providers’ own switches or from other providers or billing companies’ systems (sometimes called incollects, or in-roamers), checks the validity of billing records, matches billing records to customers in a database, and provides billing details to other systems (sometimes called outcollects, or out-roamers). The Rating Engine also guides billing records to specific customer accounts. Guiding uses the event’s identification information such as the calling telephone number to match the billing record to a specific customer account.

The Invoicing Engine aggregates billing records for a specific period (billing cycle), calculates recurring charges (e.g. monthly charges) and total usage charges (minutes or quantity of usage), and produces invoices.

The Rating Engine: Processing the Usage

As part of the billing system, the Rating Engine receives call details from various sources (event records), reformats and edits these into UDRs, assigns a customer account to the UDR (guiding), calculates call charges for each UDR, and gets the UDR ready for Invoicing.

In a traditional voice telephony environment, The Rating Engine processes UDRs in a batch mode (or at best in near real-time). There may be several UDRs for each event. For example, a call may be originating at a local switch, translated by an 800 number service, and routed through a long dis-tance switch. Billing and call processing can require a substantial amount of computer processing time because there may be many events for each call. Each UDR is rated individually after having been assigned a rating band or category first. After a UDR has been rated and the actual charge for the call is calculated, it is stored in a “pool” of billing records that are ready to be invoiced (called a bill pool). A bill pool is a group of call records that have

been updated by the Rating Engine to include charging rate information. The bill pool usually contains records that are ready for the final stage of bill processing.

Figure 1.6 shows the basic functions of the Rating Engine. This diagram shows how different event sources are received from various network ele-ments or from other companies that have provided services to your cus-tomers. These records are reformatted to a common UDR format and dupli-cate UDRs are eliminated. Identification information in each UDR is used to guide (match) the record to an account in the customer database. The customer’s information determines the rate plan to use in charge calcula-tion. The rating process uses rate tables, the customers selected rate plan, and other information (e.g. rate band, distance, time of day) to calculate the actual charge for each call. All of the information is added to the UDR and it is either placed in the bill pool (ready for billing), or it is sent to another company to be billed if the customer identification is not part of this net-work’s customer database. If there are any problems as the UDR is being processed, it is sent to Exception Investigation for further analysis.

Figure 1.6 The Rating Engine

Billing systems contain many databases of information. Some of the key databases hold customer information, usage records, rate information, and billing records that are ready to be invoiced. A customer database holds unique identification information about the customer. This includes a cus-tomer account identification number, telephone number (may be the same as the account number), authorized feature list, rate plan identifier (which rate plan the customer subscribes to), service activation dates, and other information specific to a customer or account. A rating database holds the rate plan identifier codes and charges associated with each rate plan. It may be necessary to divide the UDR into several components parts. For example, a call from a mobile telephone may be divided into airtime, land-line usage, and long distance usage.

UDRs are commonly processed using a single rating software module. This module uses rate plan identification information found on the UDR (deter-mined after the guiding process) to match to rate tables that allows a per unit increment rate. Rate increments can vary based on the time of day (TOD), day of week (DOW), holidays, and other factors. After the call rate has been determined, the Rating Engine places an initial value on the call. It may be necessary to re-rate the call based on information received after initial rating was calculated. Examples of this include: usage discounts (free minutes), toll free calls (called party pays), and calls billed using an old rate table after a customer has selected a new rate plan.

The Invoicing Engine: Month-End Processing

The Invoicing Engine uses data from the updated bill pool and adds non-call related billing charges and financial adjustments. The billing system then adds fixed recurring charges (such as monthly service fees and taxes), applies payments that have been received, produces invoices, and maintains a history database.

Figure 1.7 shows the basic activities performed by the month-end process. This diagram shows that the first step in this process is the selection of cus-tomers whose cycle is to be billed during this “bill run”. For each customer to be billed, all usage having occurred before the cutoff date is then

select-ed. The next step is for the usage to be aggregated according to the way in which it will appear on the customer’s bill; this step also includes the calcu-lation of any volume discounts to which the customer has subscribed. Fixed charges – both recurring and non-recurring – are then calculated according to the product information retrieved from the product portfolio database. Taxes and surcharges are then calculated (Federal, State, Local, FCC, Universal Service Fund, etc.) and the financial chart of accounts is updated with the debits and credits. Finally marketing and other messages are inserted into the customer’s invoice, which is then sent to a production facil-ity (print shop, CD-ROM duplication, Internet website, etc.) for delivery to the customer. The invoice is then archived in the Billing History database, and various reports are generated, such as financial reports, reconciliation reports, analysis reports, etc.

Figure 1.7: Back End – The Invoicing Engine

Clearinghouse

A clearinghouse is a company or association that transfers billing records and/or performs financial clearing functions between carriers that allow their customers to use each other’s networks. The clearinghouse receives, validates and accounts for telephone bills for several telephone service providers. Clearinghouses are particularly important for international billing because they convert different data record formats that may be used by some service providers and convert for the currency exchange rate. Clearinghouses provide a variety of services including processing propri-etary records (e.g. switch records) into formats understandable by the mem-ber carriers’ billing systems, validate charges from carriers with intersys-tem agreements, and extract unauthorized or un-billable billing records. Clearinghouses transfer messages in a standard format such as Exchange Message Record (EMR), Cellular Inter-Carrier Billing Exchange Roamer (CIBER), or Transferred Account Process (TAP) format. The EMR format is often used for billing records in traditional wired telecom networks and the CIBER and TAP formats are used for wireless networks. The records may be exchanged by magnetic tape or by other medium such as electronic trans-fer or CD ROM.

Clearinghouses receive billing records from companies (outcollects - some-times called in-roamers) and submit billing records to companies (incollects - sometimes called out-roamers). Outcollects are billing records that are sent to other systems to collect for services provided to visiting customers. Incollects are billing records that are received from other systems for ser-vices provided to their customers that have used the serser-vices of other net-works.

Inter-carrier billing systems must be capable of handling billing system errors. There are many events per call and the possibility exists for dupli-cate records or missing details in the billing records. Charges or records may be received for customers that do not exist in the local system or the inter-services (or roaming) agreement between companies may not be valid. Charges or records may be received from other companies (incollects) that have crammed or slammed bills. Cramming is the erroneous or fraudulent

addition of charges for services that were not agreed to by the end customer. Slamming is the unauthorized transfer of customer’s preferred service provider to a different service provider. When errors or omissions are detected, individual UDRs or entire batches of billing records may be flagged for return to the sender and they may be tagged for further investi-gation.

Invoices

Invoices contain the details of how much the customer should pay to the car-rier, when the amount is due, and other information regarding the bill. Invoices usually provide a customer with detailed information regarding the source of the charge (date and location), reasons for the charge (service pro-vided), and the amount of the charge. Figure 1.8 shows a sample invoice.

Management Reporting

Management reports provide information to finance, sales, and operations on the performance of the system. Reports can identify problems such as, silent churn, potential new services, and network congestion. Churn is the process of customers disconnecting from one telecommunications service provider. Churn can be a natural process of customer geographic relocation or to may be the result of customers selecting a new service provider in their local area. Silent churn is the process of customers disconnecting from one telecommunications service provider due to a competitor’s influence. Silent churn is usually the result of inadequate customer service or lack of com-petitive rate plans. Customers that are transitioning to competitor’s services will show rapid declines in usage of service.

Management reporting can also be used to discover new services. By review-ing call patterns, churn and silent churn patterns, and customer feedback, managers can determine which new services may be good candidates for their system. UDRs and network activity can also indicate areas of network congestion and corrective measures (rerouting or adding resources) can be accomplished to overcome the challenge.

Invoicing

Invoicing is the process of gathering items to be billed (rated UDRs) that have occurred over an invoice period, adding additional charges and credits that are not related to specific calls, and preparing the information (format-ting) so it may be presented to the customer in a clear way. Invoices may be delivered by mail or in other formats such as CD-ROM or email.

Processing Payments

Processing payments involves collecting assets to settle the customer’s invoices. The typical forms of payments that are received from customers include checks, cash, wire transfer, credits, and credit cards. However, other payments or credits may be applied to the customers account.

Recording the payment to the customer’s account is called “posting”. Posting usually involves using a payment coupon that has an account number on it and logging the received amount of money to the account. Ideally, the cus-tomer has provided the payment coupon with the correct amount. In some cases however, the customer might not have included the payment coupon or might have paid a different amount than indicated. In this case, posting of payments may result in errors such as posting to the wrong account or applying payment new invoices instead of old invoices.

Posting to the Financial System

The billing system records financial details (receivables) for the carrier. Periodically, summary information is transferred into the General Ledger (G/L) of the carrier’s accounting system. This summary posting groups dif-ferent types of billing charges into summary totals to be posted to difdif-ferent financial accounts. These types of accounts include receivables or expenses, and each financial account is assigned a unique number (in the financial chart of accounts). For example, payments received by credit card are usu-ally categorized differently than payments received by cash and these totals will be recorded in accounts with different account numbers.

Customer Relationship Management (CRM)

Customer Relationship Management (CRM), of which Customer Care may be a sub-system, is the process of communicating with the customer regard-ing their establishregard-ing accounts, service feature activation, handlregard-ing cus-tomer inquiries adjusting accounts for disputes (account management), technical support, selling additional products and services to the customer (post sales support), and collection services.

Account Activation

Account activation is the acquiring and entering information that is required for the system to provide services to a customer. The account acti-vation may involve many steps prior to the entry of information to the sys-tem. Account activation steps may require the customer to complete an application for service, credit check, and copying of documents that validate the identity of a new customer (to prevent fraud). Account activation also involves assigning the customer to specific rate plans for service charges. Account activation involves informing the network of customer account information and what services they are authorized to use. This is called pro-visioning of the network.

Account Management

Account management involves communication with the customer for sales related and collections activities. Typically, all communication with the cus-tomer is recorded in various formats such as call records and voice record-ing.

Account management also involves creating records to track technical prob-lems the customer may be experiencing with the service. These records of trouble (often called “trouble tickets”) are routed to technical support. These trouble tickets remain open so managers can review progress until the prob-lem is solved.

Account managers may also receive inquiries or billing complaints that require message investigation. Message investigation reviews billing records to resolve customer disputes. In some cases, account managers may be used to assist in the collection of outstanding invoices.

Billing System Costs

Billing system costs include the initial hardware, software costs of the sys-tem along with the operational costs such as invoice processing, bill print-ing and mailprint-ing, intermediary clearprint-ing house settlement companies, cus-tomer care (call centers), and collection services.

Hardware and Software

The hardware usually includes high performance computers that operate proprietary software. Due to the complexity of hardware and software billing systems, continuous training is required in order to ensure quality services to the customers and to provide revenue assurance.

Billing Cycles (Batching)

If a company has many customers, they are typically divided into cycles (or “billing cycles.”) The billing cycles are different for groups of customers. This allows the billing system to bill only a portion of the customers at a time.

Bill Printing and Mailing

In most cases, invoice records are sent to a bill printing facility or they may be sent by email or printed by the customer when the payment is made online. Bills that are sent to the printer and mailing house usually cost between $1-$3 per bill. Sending bills by email helps to reduce the cost of providing the customers with bills and receipts.

Call Center

A call center is a place where communication occurs between a carrier and its customers. Call centers assist customers with requests for new service activation and help with product features and services. A call center usual-ly has many stations for call center agents that communicate with tomers. When call agents assist customers, they are typically called cus-tomer service representatives (CSRs).

Call centers use telephone systems that usually include sophisticated Automatic Call Distribution (ACD) systems and Computer Telephony Integration (CTI) systems. ACD systems route the incoming calls to the cor-rect (qualified) Customer Service Representative (CSR). CTI systems link the telephone calls to the accounting databases to allow the CSR to see the account history (usually producing a “screen-pop” of information).

Call center telephone systems can cost over $3,000 per CSR station. The average telecommunications service provider has 1-2 CSRs for every 10,000 customers. This results in an average customer care call costing $7-$10 per call.

Figure 1.9 shows a typical call center. This diagram shows that calls may be received or originated from the call center. The customer traditionally communicates with the call center by telephone. When a call is received by a call center, the user is typically provides with a list of options by an auto-mated interactive voice response (IVR) unit. As the user selects from the list of options, an ACD system routes the call to a CSR station that is qualified to assist the customer (e.g. sales agent or technician). When the CSR agent answers the call, some of the customer’s account information may become available on the CSR’s computer screen (“screen pop”). The CSR will com-municate with the customers and should make notes in the customer’s account regarding the activity that progressed.

Collections

Collections are activities that a service provider performs to receive money from their customers. Ideally, all customers will receive their bills and pay promptly. Unfortunately, not all customers pay their bills and service providers must have a progressive collection process in the event customers do not pay their bill.

When customers are first added to a system, they are “scored” on the prob-ability that they will pay their bills. Using information on their application and reviewing the credit history as provided by an independent credit reporting agency accomplishes this.

The collection process for delinquent customers usually starts by sending a reminder messages to the customer be mail or recorded audio message. If initial attempts to collect are unsuccessful, more aggressive collection mea-sures are taken, such as: restricted calling, service disconnection and send-ing or sellsend-ing the uncollected invoice to a collection service.

Some carriers automatically re-route all calls made by a delinquent cus-tomer to a collections operator. This is called “Hot-Lining”. Hot-Lining is typically used when a telephone is first sold or activated to allow activation after the customer has provided the information to register for service or when the customer has not paid their bill.

If all attempts to collect from a customer have failed, a service provider may write off the uncollected revenue as bad debt, retain a collection agency or sell the uncollected invoice(s) to a collection service. If the account is writ-ten off as bad debt, the customer’s information is usually placed in a nega-tive file to avoid reactivation and their poor payment history is reported to a credit reporting agency. Various collection companies (collection agencies) offer collection services that work on a percentage of collected revenue. Some collection companies will pay for uncollected invoices. When uncol-lected invoices are sold to collection services, the service provider is usually prohibited from working with the customer in the future regarding payment on the account.

Billing Standards

Billing standards define the measurements, record format and the methods of transfer for billing related information within a network. New services are being offered by network operation because of deregulation of the telecommunications industries around the world. As a result, billing stan-dards are continually being revised and they are converging. Because com-panies can use different billing standards or different revisions of billing standards, clearinghouses often provide translation services between differ-ent billing standard formats.

Exchange Message Record (EMR)

Exchange Message Record (EMR) is a standard format for the exchange of messages between telecommunications systems. The EMR format is often used for billing records. The records may be exchanged by magnetic tape or by other medium such as electronic transfer or CD ROM.

Automatic Message Accounting (AMA)

Automatic Message Accounting (AMA) is a standard record gathering and billing format that is used primarily by local telephone companies to process billing records and exchange records between systems. The AMA format was created by BellCore and is now managed by Telcordia.

Carrier Inter-exchange Billing Exchange Record (CIBER)

Carrier Inter-Exchange Billing Exchange Record (CIBER) is a billing stan-dard designed to promote inter-carrier roaming between cellular and other wireless telephone systems. The CIBER format is developed and main-tained by CiberNet. The Cellular Telecommunications Industry Association (CTIA) owns CiberNet. Figure 1.10 shows some of the information (fields) contained in a CIBER record.

Transferred Accounting Procedure (TAP)

Transferred Accounting Procedure (TAP) is a standard billing format that is primarily used for Global System for Mobile communications (GSM) cellular and Personal Communications Systems (PCS). There are currently multiple versions of TAP: TAP II, TAP II+, NAIG TAP II, and TAP 3. Each succes-sive version of TAP provides for enhanced features.

Due to the global nature of 3G wireless and GSM, the TAP billing standard provides solutions for multi-lingual and multiple exchange rate issues. TAP3 was released in 2000 as a significant revision of TAP2. TAP3 has changed from the fixed record size used in TAP2 to variable record size and TAP3 offers billing information for many new types of services such as billing for short messaging and other information services. The GSM asso-ciation (www.GSMmobile.com) manages the TAP standard.

Figure 1.10, Ciber Billing Record Structure

Network Data Management – Usage (NDM-U)

The network data management – usage (NDM-U) is a standard messaging format that allows the recording of usage in a communication network, pri-marily in Internet networks. The NMD-U defines an Internet Protocol Detail Record (IPDR) as the standard measurement record.

The IPDR structure is very flexible and new billing attributes (fields) are being added because Internet services are now offered in almost all commu-nications systems. The NMD-U standard is managed by the IPDR organi-zation (www.IPDR.org.)

Interim Standard 124 (IS-124)

The Interim Standard 124 (IS-124) standard allows for the real time trans-mission of billing records between different systems, primarily between wireless systems in the Americas. IS-124 messaging is independent of underlying technology and can be sent over X.25 or SS7 signaling links. The development of standards is primarily led by CiberNet, a division of the cellular Telecommunications Industry Association (CTIA).

The Future of Billing and Customer Care

Good billing and customer care systems are a key part of the success of a telecommunications service provider. The key issues for future billing and customer care systems include offering network services, the ability to cap-ture customers from the competitor, and cost effective management of cus-tomers.

Applications Service Providers (ASPs)

ASP company owns or leases computer hardware and software systems that allow one or more users to access applications and information services on its server. ASPs usually have use or have relationships with telecommuni-cations service providers to offers application services to their (the Telcos’) customers. Examples of applications services include weather reporting, stock quotes, and Internet telephony services.

Local Number Portability (LNP)

Local Number Portability provides the ability for customers to keep their telephone number independent of their local service provider, services sub-scribed to, and geographic location. This creates a variety of challenges for billing and customer care, such as the ability to determine whether the ter-minating number is “ported” and calculating distance-based rates.

There are three key parts to number portability, local carrier portability, service portability, and geographic portability. Local carrier portability allows the customer to switch from one local carrier to a competing local car-rier and keep the same telephone number. Service number portability allows customers to keep their phone numbers when they change type of service. For example, a customer could transfer his wired home telephone service to a mobile wireless telephone service provider who is located in his local area. Geographic number portability allows the customers to take their telephone numbers (area code and local exchange number) with them regardless of their location within the country.

To offer number portability, two numbers are required. The first number, a Location Routing Number (LRN), identifies the new location, new serving switch, and type of service of the customer. The second number is the “old” telephone that the customer is known by to the outside world. When a “port-ed” customer’s telephone number is dialed, the customer’s LRN is used to determine the location of the switch that will terminate the call.

Local number portability complicates the billing system’s ability to identify the customer and apply location-sensitive rates.

Customer Self-Care

Customer self care is the process of a allowing the customer to review, acti-vate, or disable services without the direct assistance of a Customer Service Representative (CSR). Customer self care can be as simple as providing account billing information to the customer by telephone through the use of an interactive voice response (IVR) system to providing interactive service activation menus on an Internet web site.

Although customer self care can increase customer satisfaction (although it very frequently achieves the opposite!), it is primarily implemented to reduce the cost of customer care services. Some of the challenges of cus-tomer self-care include the non-real time nature of billing systems (account status), limited customer knowledge of key features, services, and available rate plans.

Figure 1.11 shows that a customer self-care system can be used to review product or service options, check billing records, and change customer fea-ture options (called “provisioning”). This diagram shows that the customer can contact the billing and customer care system via a gateway. The gate-way may contain Internet web access (for graphic displays) or interactive voice response (IVR) systems to allow the customer to select their account, receive billing and customer care information, and possibly change features and options.