Real-time: changing the billing landscape

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Real-time: changing the billing landscape

Intelligent Next Generation Billing Congress Berlin, November 2006

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Agenda

The charging and billing vision

Real-time is central to the vision

The supply side is changing

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Ovum

is a leading global telecoms, software & IT

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Developed consulting methodologies and models

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Level 3

The charging and billing vision

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Billing requirements are expanding from voice

to groceries

Customers will want to pay for a variety of products and

services via their communications network:

basic telecoms services - voice and the access mechanism

itself

telecoms specific services, eg directory service, voicemail

Web-specific services, eg digital picture storage, email

Content, eg TV, music, maps, news, football scores

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Drivers for telco charging and billing today

Customer needs Convenience Reliability Clarity Spending control Freedom of choice Telco needs

Flexibility to support many

different pricing model, including bundling of services

Flexibility to support different business models

Minimise fraud and bad debt Keep the customer happy Drive down opex

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Uncertainty is coming from many directions

Will micropayments

finally make an

impact?

Where will I be in

the value chain?

Will advertisers not

end customers pay

in future?

?

What’s the

impact of

regulation?

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So, there is no single vision of what will be

needed

There are two extreme scenarios:

The telco is at the heart of the charging and payments machine

complexity, high cost, high risk but customer ownership

The telco is the access provider only

simple, low cost operation, flat rate, no customer ownership

Telcos have to respond to the

needs of their own particular market

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But there is an architectural vision

Billing layer Charging layer

Online

Top up ePayment Voucher management Billing etc

Customer and enterprise layers

Off line

Real-time rating Real-time balance management Rating

Financials CRM applications etc

Network layer Service layer

GPRS 3G PSTN IP etc

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Level 3

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Telcos must be driven by business needs not

billing technology

Real-time, converged platforms, IMS – the most recent technology hypes which have been driving talk in the billing industry. But not spend

Telcos need to take a holistic view of their charging and billing

requirements – both CIO and CTO must be involved in the discussion. Real-time enables:

Very short set-up speed

Fraud control

A telco should invest only where there is a business case for these characteristics

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Billing is part of the “Order to Cash” process not

a standalone application

First define the business processes and then consider the systems

Sell Provision Measure usage

Collect cash Charge

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New investment in real-time for a mobile

operator is triggered by IN replacement

Real-time is well understood by mobile operators

Replacement is being driven by the age of existing systems and their lack of flexibility

The solution is phased consolidation, based on a positive business case

Post paid voice

Prepaid content/data

All services all payment methods Prepaid?

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New investment in real-time for a fixed operator

is triggered by broadband content

Fixed operators have never needed real-time. Multiple drivers for change today:

Offering a better service to customers – immediate discounts, up-to-the minute ebilling, budgeting controls etc.

Supporting Fixed-Mobile convergence

Offering broadband content

As a service to wholesale customers

Need to replace legacy billing systems which are becoming too expensive to maintain

Getting ready for IMS

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Level 3

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The supply side has been split

The IT suppliers - meeting the needs telcos to charge and bill postpaid customers for many years.

Specialists, many small niche companies

Modular software products with extensive customisation

Product development from simple voice billing to very flexible rating, partner management, content billing etc

The IN suppliers – meeting the needs of mobile operators to charge and bill prepaid customers

Just another product line for a small number of network equipment providers

Focused, standard products have always been real-time and carrier grade

IT suppliers have moved into this segment

The value added services providers – meeting the needs of mobile operators and content owners for service-specific billing.

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Realignment is underway

IT and IN capabilities are coming together. For example:

Comverse acquisition of CSG Kenan

Oracle /Alcatel and Oracle/Siemens partnerships

Oracle acquisition of Portal

The product suite covering all telco systems (OSS, BSS and enterprise IT) is being born:

Amdocs

HP

Oracle

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More change to come

Will telcos be bypassed in the billing process?

$

$ $

$

The local telco

Local and global content distributors

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Level 3

Outsourcing - a way of reducing the

challenges of change?

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Outsourcing means different things to different

people

Business process outsourcing (BPO) – handing over a whole process or task to a 3rd _{party to manage}

Applications development and maintenance (ADM) – handing over responsibility for the development of the IT application

But suppliers and customers aren’t hidebound by neat definitions

Telcos lag other industries in using outsourcing. In telco IT, billing has been the most likely place to find it. Outsourcing of post-paid billing functions has long been established in North America.

A bigger role for outsourcing in Europe needs some high profile, positive examples

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Outsourcing has its place but it’s a difficult sale

Legacy processes and systems New processes and systems Small focused Large integrated telco ADM BPO

BPO for niche functions

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Summary

Telcos need to hold a long term vision in mind but take pragmatic steps forward, based on demonstrable benefits at each stage

Both Network Operations and IT need to be involved in the process, and suppliers need to reach out to both sides

Telcos should throw away their preconceptions about the suppliers and take a broad look at what’s out there

Real-time charging and billing is a key part of next generation telco systems but only one driver for change

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