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Do we need billing?

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Amazon, Spotify and Netflix don’t send bills – why should telcos?
Do we need billing?

"We've spent zillions of dollars on BSS but who is in need of a bill?”.This was the question asked by KPN CTO Eric Hoving during a panel discussion at last week’s TMF Live event in Nice. This is not a new question. There’s been a lot of debate going on for the last 5 years about the future of billing, but still telcos are using billing systems as some customers want to receive bills. These include corporates and people who like the receive a bill in the post so they know that they’ve spent the same this month as they did last month on their bundle. It used to be people got their phone bill in the post and then went down the post office to pay it in cash or by cheque. I’d take a guess and say that most people don’t even look at their phone bill as they roughly know how much they pay, month in month out. The only time they’d do so is when they notice the payment from their bank account is larger than expected. Fixing this isn’t a billing issue – it’s a communications issue.

On the same panel, Phil Jordan, CIO Telefónica, gave some air to the billing companies by stating that "legacy technologies underpin a multi-billion-dollar industry." He then went onto state that traditional billing is on the way out, "We need to kill some of these old terms like OSS and BSS," he said. "I think we can get rid of the billing engine at some stage and charge in real time like digital companies."

The move from billing to real-time charging is already underway. Billing systems came about in the days when people were charged for individual phone calls and received a paper bill at the end of the month as one month’s usage was different to the next. Then along came pre-paid and this saw the introduction of real-time charging.  Then came the option to buy services with debit and credit cards. Billing is traditionally batch based. Charging is real-time. Telcos are upgrading their systems to be automated and real-time in order to provide services and manage their business the way that people use the internet – in real-time. Many telcos are adjuncting a real-time charging system (or all data services) onto a legacy billing system and letting the billing systems die a natural death over time, rather than go out and invest millions (sorry – zillions) in a new billing system.

Now as telcos move to roll out new digital services and become the digital service providers that everyone was talking about last week at TMF, it really does seem like billing is on the way out – but it will take time. There are many, many customers who still want bills. I for one need a bill to do my expenses. But I just as easily print off a statement of account and use that for expenses if I was given the option.  Corporate customers want bills and it will take a while to get them to change their minds.

Having also made an interesting point about billing when he said that, “nobody ever uses the data of the billing system”. I am sure that some of the revenue assurance guys in the room were looking at each other at this point wondering about this. But, I can see what he means. In the past billing data was a great source of usage information for data warehouses when offers were simple and half price calls to the US on the 4th of July was considered an innovative offer. Now, it’s all about real-time. The move now is for contextual personalised offers direct to the device. To do this you need real-time data to understand the customer context which automatically triggers a personalised offer. You can’t do this with batch based billing data. You need real-time data that is collected for real-time charging.

This would have made an interesting discussion at an event like TMF, if it wasn’t so serious. We all know that the industry needs to change and many telcos are making huge investments to do so. But recently we reached a tipping point. It’s no longer about what could happen if we don’t change. It’s about what is happening now. For the first time ever, mobile data growth in the US is negative. After 17 years straight quarter on quarter mobile data services revenue growth, the results for Q1 2017 showed revenue growth for mobile data services in the red. The move to digital services supported by real-time and automated systems is no longer a ‘nice to have’ or a sideline digital project – it’s fundamental to the success of the industry.

Martin Morgan

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Martin Morgan
Vice President of Marketing

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