make the right connections - Connect-World

Convergent Billing
low subscriber penetration, with the influx of
new business revenue on the horizon, the mantra
of ʻlow functionality customized systems
for small operatorsʼ is no longer relevant. Now
many operators are facing the ultimate threat -
their first generation billing and customer care
systems are collapsing under the pressure of
the rapidly growing business sector.
Indeed, African operators have less tolerance
for lost revenue and are less forgiving of excessive
total cost of ownership, TCO. They
may, operationally, require less ʻmoving partsʼ
within their solutions and many of them are
too remote for generic off-site hand holding,
but African operators are no longer small and
inexperienced compared to their Western European
counterparts. They are, in fact, learning
through the mistakes made by their European
counterparts in the past. African operators are
now looking towards new carrier grade billing
and customer care architectures to equip them
for future growth. Ultimately, they have the
highest demand in the market for systems that
support businesses out-of-the-box, and rightly
insist that these solutions be proven using ʻtier
oneʼ operator standards.
Prepaid, post-paid… or convergent
Choosing the right billing system to operate
efficiently in this market is an important consideration.
The situation the African communications
market faces is quite different than that
seen in more developed regions of the world.
Local operators currently experience two opposing
pressures. First, African economies are
overwhelmingly cash-based. Consumers have
few, if any, options - credit cards or cheques,
for example - available to them. Second, since
the rollout of mobile services is relatively
more expensive in Africa, there is great pressure
upon operating company margins.
Given the lack of communication alternatives
within Africa, international businesses are
willing to pay a premium to those local operators
that are able to rise to the challenge and
provide a good range of high-quality communications
services.
Nevertheless, we must not forget that local African
businesses also need the same or, indeed
more, flexibility in their payment methods,
enabling them to compete more effectively
within limited credit markets, and still grow
to meet the exploding demands of the African
market. Previously, post-paid credit was discouraged
as operators could not afford to bear
the financial risks involved in the case of nonpayment,
and business users could not afford
the risk of excessive utilisation.
Given the need in Africa for high levels of cash
control, a pure post-paid billing solution, without
real-time credit control, is not, on its own,
economically feasible. The financial gains
- the additional revenues that may be generated
- of attracting international businesses are
often outweighed by the risks that must be assumed
to do so. However, combining the flexibility
of the extended credit characteristics
of post-paid offerings with the strict real-time
credit controls that apply typically to pure prepaid
payment methods creates an ideal billing
model. The result, convergent billing, is a solution
that combines both prepaid control with
post-paid flexibility and credit - suitable for
the African reality.
Real-time customer management
A convergent billing system that supports both
prepaid and post-paid methods, offers African
operators the best of both worlds. Convergent
billing enables operators to maintain their existing
base of local prepaid customers and, as
well, attract and serve multi-national and local
business customers.
However, the functionality of the convergent
billing system involves much more than just
combining different payment methods. The
real-time nature of the platform opens up a
wealth of new value-added financial services
that can assist business customers to not only
control, but also leverage, their budgets and
spending. With both prepaid and post-paid
balances available on the same account, operators
can let their customers select how they
pay - transaction by transaction. This enables
completely predictable, controllable, monthly
payments with the flexibility to top-up credit
limits as and when increased communications
needs so require. This control also offers invaluable
security by protecting against unauthorised
use where fraud is an undeniable
temptation.
This unique flexibility of the convergent system
also offers the ability to have multiple
personal profiles on a single mobile device.
This is particularly important within the African
market, where mobile handsets are a
valuable commodity. Convergent payment
options enable employees to make calls to the
office, customers or suppliers, for example, on
the companyʼs bill, but use the same phone to
make evening calls charged against their own
prepaid balance.
Embracing the convergent future
Unprecedented profits potentially await local
operators in Africa who actively embrace the
new opportunities presented by the influx of
international direct investment. Those who
prepare in advance, and deliver the valuable
mobile communications and payment methods
these sophisticated businesses require, will be
the ones to succeed.
Mobile broadband with the ability to deliver
high speeds and instant access can provide the
crucial communications channel required to
attract and satisfy overseas investment. However,
this exciting new mobile technology must
be underpinned by robust back office functions
in order for its delivery to be a success.
Operators must look towards billing solutions
that promote business growth via convergent
financial functionality that offers a variety
of payment methods - including variations
and combinations of traditional prepaid and
post-paid schemes - multiple user profiles,
and charging flexibility. Convergent billing,
which combines the strength of prepaidʼs realtime
controls with the flexibility and service
options of post-paid payment methods, holds
the key to unlock an important new revenue
stream. Convergent billing systems will help
mobile operators contribute to the continentʼs
enormous economic potential during the ʻAfrican
Centuryʼ.
16 Issue 2006