The Billing Journal - Amdocs

The Billing Journal
Volume 1 Issue 3

Contents
Evolving the GBA Map to include the partner-rich value chain 3
Consolidation at Cable & Wireless 8
The GBA’s Next Generation Revenue Management Initiative 10
From mobile to multi-play 13
No strategy without billing 17
Realising real-time charging opportunities 20
Voice 2.0, the future of billing - and what it means for BT 24
Recipe for success in a world of hyper-competition 27
Towards payment solutions for mobile commerce 30
Converged billing - myth versus reality 34
Welcome to the LOCAL Billing Association 36
Authors
Graham Carey, Oracle - graham.carey@oracle.com
Geoff Ibbett, Subex Azure - geoff.ibbett@subexazure.com
Idan Carmeli, Amdocs - idan.carmeli@amdocs.com
Nicole Thierhoff, LHS - nicole.thierhoff@lhsgroup.com
Jaco Fourie, Ericsson - jaco.fourie@ericsson.com
Grant F. Lenahan, Telcordia - glenahan@telcordia.com
Tom Forsyth, Telcordia - forsytht@telcordia.com
Patrick Métaireau, eServGlobal - patrick.metaireau@eservglobal.com
Howard Woolf, Comverse - howard.woolf@comverse.com
Doug Zone, Metratech - dzone@metratech.com
2 | THE BILLING JOURNAL
©GBA 2007

Evolving the GBA Map to include the
partner-rich value chain.
Graham Carey, Director, Industry Solutions, Oracle Communications
and President of the GBA.
Traditional telecommunication service providers are facing
unprecedented change. There is competition not only from
within the sector but from outside, from businesses ranging from
media companies through to some of the world’s largest global
brands. Almost every day a new service is introduced to attract the
increasingly fickle consumer. As consumers grow more demanding,
in terms of both the services they want and their quality, the
industry must realise that it has never been easier for the customer
to change service provider. Technologies are not standing still
either, as developments such as WAP, GPRS and now High Speed
Downlink Packet Access (HSDPA) have proved. However these are
all meaningless to the most critical partner in the value chain – the
consumer.
We are at a point of momentous change in our industry
– gone are the days and comfort of the last 100 years when
most things remained static. Now, not only does technology
change on a daily basis, so too do the aspirations of the
consumer and the competition.
Businesses today have a number of objectives that they
must address in parallel:
• To rapidly deliver new and profitable services
• To grow their brand value
• To cut costs and become operationally more
efficient
• To modernise their infrastructure
One of the consequences of change is that service
providers have to turn to collaborative agreements with
others in the value chain. We are no longer talking just
about simple voice services. The April issue of Mobile
Media [1] explains that for nearly a third of the 69 operator
revenues they track, data revenues now makes up at least
20 percent of the total and in many cases far exceed this.
Therefore the service provider of today must be able to
deliver a rich array of services that are a mix of voice, data,
content, video and true multimedia - multidimensional
services. They simply cannot do this alone – the service
provider of today has to work closely with partners from
multiple markets and industry sectors. Media companies
see personal communications as a new channel to the
consumer. The telecoms operator can see that new
content and video gives the opportunity for new revenue
streams - the two clearly need to work in partnership.
The Previous GBA Billing Map
When the GBA first introduced its Billing Map it recognised
that businesses were not just interested in systems; instead
service providers needed to understand the three tenets of
systems, processes and people as well. The first GBA Billing
THE BILLING JOURNAL | 3

1
Customer Care
OSS / CRM / BSS and Databases
2 3 4 5 6 7
Order
Processing
Mediation
Rating/Guiding
Billing/
Discounting
Payment
Processing
Collections
Processing
8
Audit Stream
Figure 1: The GBA’s previous Billing Map (version 1) and eight key critical business processes.
Map enables the key business processes to be recognised
and - most significantly - the Key Performance Indicators
(KPIs) associated with the processes to be identified and
thus measured. The early benchmarking studies from
the GBA gave the first and only quantifiable source of
reference data for this area [2]. In 2006 we updated the
GBA Map to cover key areas of next generation services,
as well as recognised that full convergence of prepaid and
post-paid services and payments was becoming a reality.
The existing GBA Map – (see Figure 2) was a key deliverable
for the GBA in this area and included concepts such as
online and offline charging . The GBA Map also illustrates
the relationship of billing and revenue management, with
other critical business systems and processes.
The new GBA Map enabled the discussion of how the KPIs
for next generation services are evolving. See GBA Billing
Journal [3] for full discussion of the current, published,
GBA Map.
However, the world of telecommunications will not stand
still, nor will the GBA Map. Constant evolution is the name
of the game!
Evolution of the GBA Map
The GBA Map has traditionally focused on the issues
surrounding the consumer with regard to pricing and
charging as well as the need to recognise how services
and infrastructures change as truly converged services
are delivered. Until now we have paid minimal attention
Information Management
Product Lifecycle Management
1
2
Marketing Operations & Offer Management
Customer Interaction Management
3 4 5 6 7
Fulfillment
Online Charging
Billing
Payments
Collections
- Order
processing
- Number
management
- Inventory
- Activation
- Discovery
Service
delivery
Real-time
Mediation
Mediation
Offline Charging
Balance
management
Real-time Rating
Rating
- Retail
- Business
- Wholesale
- Prepay
statements
- Partner
statements
- Bill payment
- Top-up
- Voucher
management
- Overdue
reminders
- Direct Debit
invitations
- Debtor
Management
8
9
10
Partner Management: Interconnect, Content, DRM, Sponsorship, Advertising & Taxation Management
Revenue Assurance, Fraud & Audit
Key Performance Indicators
Enterprise management
Figure 2: GBA Map (version 2) with ten critical business processes.
4 | THE BILLING JOURNAL

to the other partners involved in the delivery of next
generation services. Today’s services are no longer from
services providers alone. As I have discussed, services
today - and tomorrow - will come from a wide variety of
partners and partnerships. With these new partnerships
come new business models and increasingly complex
value chains. Terms such as sponsorship, advertising and
promotion now emerge and each partner within the value
chain requires a share in the value. It will also become more
important to truly understand which products and services
are delivering positive revenue and profitable margin,
which services are contributing to the brand success and
which are simply there to satisfy the ‘me-too’ element.
the critical interactions with the business eco-systems.
The changes fall broadly into two primary areas. The first
is the need to address the whole area of revenue share
across all partners throughout the entire value chain.
The second is to make sure that the financial systems
that support the new business models are robust and
deliver the appropriate financial management controls as
the enterprise evolves. We would not expect an air pilot
to fly a jet without a working real time dashboard, nor
would we expect the leaders of our industry to run their
business without a clear real-time view of the revenues
and profitability. The following are the three most critical
new areas that need to be fully understood:
Over the past six months we have been reviewing the GBA
Map and have been discussing its inevitable evolution. The
eco-system is changing to include Customer Relationship
Management (CRM), Financial Management, Analytics,
Revenue Management, and the merger of OSS and BSS. It
is currently a working model but we wish to share with you
our thoughts to encourage healthy debate on the changes.
Figure 3 depicts the draft version of the revised GBA Map
for 2007 and in the following paragraphs I will share with
you some of our thoughts on the proposed changes.
Firstly, we are now dealing with much more that just billing.
It is all about managing and monitoring and knowing
about all revenue streams; it is revenue management and
• Partner Relationship Management
• Partner Settlement
• Dispute Management
As we discuss each of these areas we need to understand
that today’s value chains are no longer wholly under the
control of the telecommunications service provider – they
are mixed, multiple and constantly evolving and they will
not be the same for each and every service being delivered,
nor will the business rules be the same for every partner
within the value chain.
Partner Relationship Management (PRM)
This process and function mirrors the frequently discussed
area of CRM but with the focus on the business relationship
Business Strategy & Objectives: Mission & Vision
Business Process & Information Management (Business Intelligence)
Product Lifecycle Management (Marketing Operations & Offer Management)
Customer Management (CRM, CEM, Consumer Contract, Price plan)
Fulfillment
- Order
processing
- Number
management
- Inventory
- Service activation
- Discovery
Service Usage
- Service
- Consumption
Online Charging
Service
delivery
Real-time
mediation
Offline Charging
Mediation
Balance
management
Real-time
rating
Rating
Customer Billing
- Retail
- Business
- SME, SOHO
Partner Settlements
- Royalty calcuations
- Revenue share
calculations &
contributions
- Interconnect
Invoice Production
Paper, Online, Usage Statements, Loyalty
Payments
Bill payment,
Top-up, Voucher management
Dispute Management
Refunds, Partial/full
Collections
Overdue reminders, Direct Debit
invitations, Debtor management
Enterprise
Management
- Financial
management
- Accounts
Receivable
- General Ledger
Partner Relationship Management (Contract, IP, Sponsor, Advertiser, Promoter, Price plans)
Revenue Protection (Revenue Assurance, Fraud Management, Audit and Credit Risk Management)
Revenue Management (Reporting ARPU/AMPU, Customer Lifetime Value, Data Warehouse…)
Figure 3: The GBA Map (version 3) – draft for discussion
THE BILLING JOURNAL | 5

etween the primary service provider, who owns the
consumer, and the many partners in the value chain. It
recognises that partners today may be content providers,
media partners, advertisers, sponsors, promoters and
even other service providers. It is the role of this function
to financially model the business relationships that exist
between the parties involved. This must also take into
account the intellectual property and ownership rights
associated with the content or services being delivered.
It has been said that content without rights is actually a
liability whereas content with rights is a true asset. With
intellectual property rights comes the full knowledge
of exactly what can be done with the content or digital
asset. For example, to whom may it be delivered, on
what devices, and in what territories, and then as a
consequence what royalty payments will result from any
given transaction or service use These contractual rules
govern the price that may be charged to the consumer but
most importantly they will also dictate how the revenue
is to be shared amongst the participants throughout the
value chain.
Today there is a great deal of talk about advertising and
sponsorship and how traditional advertising is moving
from an offline to a predominantly online model. How will
advertising in the telecoms non-broadcast, non-paper but
on-demand, online space work Will advertising be push
or pull How targeted and consumer focused can it be As
these changes are introduced the payment and contract
models associated with advertising need to change. It
will be much more about actual consumer hits and follow
through than simply advertising placement and product
positioning. It will be these new parameters, derived from
the PRM functions that will govern the payment terms
between service providers and advertisers, mixed in with
the more traditional subscriber numbers and potential
audience sizes.
Payment terms are worthy of a little extra thought. We
should certainly anticipate situations where a partner is
paid an advance for the delivery of a service which might
then be modified, dependent on that service’s success. Or
of course the complete converse could be true. A partner
offering a portfolio of services might also wish to tie the
final revenues they receive to the overall success of their
portfolio. Where and when such variations do take place
will also affect the timings of revenue recognitions. Today
within the consumer environment we have to deal with
factors such as subscriptions, forward commitments and
advanced payments. So too, in the partner world, similar
financial concepts between the partners and the primary
service provider have to be addressable.
In simple terms it is this function of PRM that in effect
sets the rate plans and payment terms that are to be used
across the value chain.
Partner Settlements
As discussed it is the PRM function that defines the
contribution elements and business relationships
between partners in the new value chain. The function
of Partner Settlement now serves to exchange real funds
and perform the remittances between those parties
and partners in the value chain. The primary source of
income would, of course, be the consumer’s payment
for a given service but as advertising, promotion and
sponsorship grow in strength and prominence they will
become a significant source of income. It is thought that
in some new business models many services will be free
to the consumer and will be paid for by others in the value
chain. The Partner Settlement function will take any given
transaction, group of transactions or simply an event (such
as a hit on an advertising link) and monetise that activity,
taking the charges calculated by the charging function and
then applying them to the partner balances – i.e. partner
remittances. Business rules stipulating when charges are
to be applied, when revenues can be recognised, whether
they are aggregated or individual (as defined by the PRM
contract), will be implemented at this point.
Partner Settlements therefore enact the financial business
rules as defined by the PRM function by performing the
required remittance at the required time.
Dispute Management
This is an interesting new addition to the GBA Map and one
that I am confident will become even more prominent as the
complexities of transactions evolve. Service providers today
largely deliver their own services and use their own assets in
that delivery. Dispute Management for the service provider
is relatively easy to conceive as any dispute can usually be
handled and authorised by the service provider itself.
Let us use an example involving a new mobile service
bundling a ring-tone, screensaver and game; all themed
with the latest blockbuster movie. The consumer
purchases the bundle at a special promotion price of
$10. The consumer is, of course, blissfully unaware of
the contractual relationships between the three content
providers, the service provider and the network provider.
If all goes according to plan there is no problem; the
consumer gets their bundle, the service provider receives
their $10 and is then able to perform a revenue share to all
involved in the delivery of the bundle. However, imagine
the situation that might arise if one element of the bundled
service does not get delivered to the consumer. What
happens to the payments in the value chain Does the
6 | THE BILLING JOURNAL

consumer pay the full $10 charge Do they get a partial
refund or a full refund, or a credit voucher How is the
money settled across the value chain Who was actually
at fault for the poor delivery Was it the consumer with an
incorrect handset configuration Was it a problem with
the content itself Was it a network problem – or some
combination of all three Just to complicate matters,
maybe the entire bundle was delivered but the game
didn’t work every time! The permutations are potentially
endless but the business problem of dispute management
remains. The business rules to be applied here are akin to
those of the traditional retail consumer environment. The
example above is relatively simple but demonstrates that
a potentially complex transaction could lead to a costly
dispute if the business rules of engagement have not
been fully thought through at the outset.
So Dispute Management is the function that deals with
the process when things do not go according to plan – it is
the exception handling function.
Next Steps
In the next few months the GBA will take the GBA Map
and further drill down into each section to identify the
critical business processes that need to be addressed. We
will identify the KPIs for each process so that measurable
comparisons across the billing community may be made.
These new KPIs will be used to drive both a new next
generation and a partner benchmarking survey of service
providers within this changing area.
enterprise business systems that report the actual financial
scorecard and revenue radar of the business. With more
complexity and a vastly growing amount of data collected
as part of these new business processes, the importance
of business insight and intelligence will evolve. It will no
longer simply be sufficient to use data mining tools in
isolation but true real time decision support tools will be
required to maximise the moment of truth for a consumer
as they interact in real time with the new array of services
on offer.
And Finally
If you would like to participate in this lively debate and
be part of the next benchmarking survey please contact
Francesca MacManaway - fmacmanaway@tmforum.org.
We anticipate that there will be a webinar on this topic in
the very near future.
References:
1) Mobile Media , April 2007, Volume 8, Number 7
2) GBA Website – benchmarking section www.globalbilling.org/
benchmarking.php
3) GBA Map - A 10 step offer to cash model, Pat McCarthy, GBA
Billing Journal, Volume 1 Issue 2, October 2006
4) Economist Survey, Battling the Decline of Fixed Voice,
October 2006
Conclusion
The GBA Map is an evolving document and within the
GBA we welcome a healthy debate about the issues
surrounding its ongoing evolution. The GBA map has
evolved and is designed to sit alongside eTOM, and is
complementary to the TM Forum’s activities in this regard.
This article mentions the three primary areas of change
but from a quick examination of the GBA Map we can see
that other areas have also been added. As businesses both
grow in complexity and in the value of their partnerships,
increasingly complex and robust financial management
controls, across the value chain, will be required.
Telecommunications businesses currently receive around
20 percent of their non-voice revenues from ‘data’ services.
However, a recent Economist Survey [4] from October 2006
predicts that within 3 to 4 years 30-40 percent of executives
believe that voice services will account for less than 50
percent of their revenues and that in 5 to 6 years this will
have risen to over 75 percent. This will inevitably mean that
the values and scale of the business partner relationship
is likely to be significant. As a result this will call for more
robust approaches with respect to debt management,
late payments and how these factors are posted to the
THE BILLING JOURNAL | 7

Consolidation at Cable & Wireless
Interview with Paul Mitchell (PM), Director, Billing and Revenue Assurance
Cable & Wireless Europe, USA and Asia
Cable & Wireless is in the process of a major billing transformation
programme. The aim is to ‘improve customer service and maximise
cash flow’ by consolidating their numerous billing systems, maximising
efficiency gains and reducing the ‘cost to serve’. The Billing Journal (BJ)
went to find out how the project was going.
BJ: Paul, thank you for taking the time to talk to us. From
what I hear this sounds like a major project. Tell me about
your involvement.
PM: I am currently working on two major transformational
programmes within Cable & Wireless, both of which will
deliver major strategic goals in terms of cost reduction and
service improvements for our customers. The first project’s
aim is to consolidate 90 percent of our billing - currently on
27 platforms - to four by the end of July this year. By doing
this we will streamline part of the order to cash process,
enable quicker to market billing solutions and reduce the
cost and complexities of our billing environment which
will deliver working capital benefits internally and more
importantly, benefits to our customers.
The second project is building a Finance and Billing centre
of excellence in India, partnering with Wipro in terms of
operational models, and TCS (Tata) in terms of development.
This is a company-wide programme allowing us to scale
up our delivery capability in a cost effective way, whilst
improving service through efficiency gains - essentially
doing more for less.
BJ: It sounds very ambitious. Why are you running the two
at the same time
PM: Our industry still has a poor reputation for customer
service and historically it hasn’t reacted fast and efficiently
to market conditions. We decided to go for an all-out
‘creative approach’; you cannot afford to deliver slow
transformational programmes as they just die on their
feet and end up sucking up cash and delivering very little
benefit. Through our two programmes we can quickly
make sure we deliver the service experience our customers
desire and deserve.
BJ: So, what was the starting point
PM: We currently have 27 billing systems and as I say, we
want to consolidate 90 percent of our revenue onto four
systems. The other ten percent will remain on several legacy
systems - which, to be honest, are not a huge overhead.
We will let those systems carry on until the products are
not required by our customers and simply disappear over
time. We will have tier one strategic platforms that will
support the UK retail billing (voice, IP and data) and the
wholesale and global business.
BJ: What resources do you have to work with
PM: We have about 100 people working on this. We have
a team of 30 here in the UK and as I mentioned, we are
also working with one of our partners in India, TCS, on the
development side. Doing some of the projects in India works
out at about 20 percent of the cost of doing it in the UK.
BJ: Tell us a little about the process that you are following
to get this done.
PM: Well, obviously we spent a lot of effort scoping out
the project and mapping products and customers. In
terms of the ongoing work we now have weekly user
group sessions which include the Product, Provisioning, IT,
8 | THE BILLING JOURNAL

Commercial and Finance teams. We also have a daily call
with IT and the supplier to make sure that everything is on
track. Then we have monthly programme board meetings
to report on progress.
BJ: And the end result
PM: The end result will be extra functionality including
the capability to do product/customer ‘specials’, provide
e-billing functionality with a single feed and also allow for
speedier cash flow.
BJ: What do you think are the factors for success
PM: Strong programme management without a doubt.
We have four work streams and they are all well defined,
which is essential. So we have the supplier, IT and Billing all
represented on the four streams.
There is also an appetite for supporting this project at
executive level; this project is an integral part of the
five-year road map for Cable & Wireless as it clearly
delivers cost savings and value to our customers. It is
a flagship programme and a way of us showing the
industry what we can do and what is possible using an
innovative approach.
BJ: OK – so the next question is what are the major
hurdles
PM: Clearly there are some cultural differences working
with India. Where this has been the case we have had
open, honest dialogue and have worked hard to find
ways of working together in the most productive and
efficient way.
BJ: How do you manage it internally
PM: You have to be tough. You have to railroad where
necessary. If you are changing provisioning or changing
rating then you have to get in front of the people
responsible for those areas and reinforce the fact that the
changes are necessary. That they will make the whole
process better in the long term, and that they have to
accept short term inconvenience to make it work for
everyone. A lot of it is about breaking down barriers
and territories that have built up over years. At Cable &
Wireless we are all passionate about fulfilling the needs
of our customers and so we just have to keep in mind the
end goal of ensuring that we deliver an excellent service.
It is a fact of life that you cannot deliver this kind of project
without changing the way that people work. The inertia is
actually inevitable; we are talking about ten years of tariff
plans and products which are about to be changed. We
are standardising the rate plans. We are also doing the
data cleansing and product rationalisation at the same
time as we are doing the migration which makes it more
complex. We also have to make pragmatic decisions about
how much data cleansing to do – you could spend the rest
of your life cleansing data and nothing else would ever
get done.
BJ: Presumably you have excellent resources available
to you
PM: Absolutely. I have a very experienced group of
colleagues working on this but you still have to be
innovative in the way that you deliver against the
milestones - a one week delay could be a £100K cost. It
takes a certain type of individual who can work in this
type of environment, where you need to find a new
way of delivery either through cutting short another
part of the process or by drawing on your colleagues’
innovative skills.
BJ: And what about you – what are the biggest personal
challenges in all of this
PM: Holding my nerve. You have to be resilient and strong
in what is a very high-risk strategy involving a huge amount
of revenue. What makes it easier is that we have the right
people on board, great support and the governance in
place to mitigate that risk.
It is about communications and relationship building. And
not just internally - we spend a lot of time talking to our
major customers, including our resellers, who need to
bill live data. We use a team of dedicated Billing Account
Managers and our highly experienced Communications
team and the customers do respond positively when you
are up front and honest with them.
BJ: And will you get there Will you deliver this by the
end of July
PM: Yes we will. But I foresee one or two sleepless nights
between now and then!
BJ: We will leave you to get on with it - and thanks again for
taking time out to talk about these fascinating projects.
THE BILLING JOURNAL | 9

The GBA’s Next Generation Revenue
Management Initiative
Geoff Ibbett, Director, Product Management, Subex Azure and Leader, GBA Next Generation Revenue Management Initiative
New, content driven services will help operators combat the problem of
rapidly commoditising traditional voice products, but they will have even
more complex revenue distribution and settlement chains associated
with them. This will involve new partners, resellers and content providers
as different business models and partnerships evolve to take advantage
of this new delivery environment.
Operators will not only have to manage their own revenues
- they will also find themselves cast as trusted partners for
product delivery and payments relating to the sharing of
revenues generated.
This new role will bring sharply into focus the efficiency
and effectiveness of an operator’s billing and settlement
processes; it will place higher demands on methods of
revenue protection such as revenue assurance, fraud
management and credit risk management.
The scope of revenue management, therefore, in the
context of next generation networks is not limited
to grappling with a new delivery network and new
products and services; it must also evolve to provide
an integrated, consolidated view of the financial
performance of an enterprise.
To help operators tackle the upheavals that the introduction
of IP-based environments will bring to the industry the GBA
has merged a number of its current Initiatives to provide
a working group focused on the integrated nature of the
future of revenue management.
10 | THE BILLING JOURNAL
The GBA Map is being refined and extended to address all
of the areas impacted by this step change in the industry,
especially the area of partner management, a key area of
business focus in the next generation environment. The
current status of the map is shown opposite:
The GBA’s Benchmarking initiative will contribute its KPIs
and industry guidelines to help bring this framework to
life. The current top ten KPIs are shown below:
1. Time taken to make data available for billing
2. Percentage of billable usage falling into suspense
3. How often suspense files recycled
4. Days from billing cut-off to distribution of invoices
5. Notification of payment - application customers’
records
6. Collections efficiency against credit terms
7. Percentage of incoming customer queries relating
to Billing
8. Bills adjusted per thousand
9. Time taken to resolve major bill processing faults
10. The Cost of Billing (as a percentage of revenue)

Business Strategy & Objectives: Mission & Vision
Business Process & Information Management (Business Intelligence)
Product Lifecycle Management (Marketing Operations & Offer Management)
Customer Management (CRM, CEM, Consumer Contract, Price plan)
Fulfillment
- Order
Processing
- Number
management
- Inventory
- Service Activation
- Discovery
Service Usage
- Service
- Consumption
Online Charging
Service
delivery
Real-time
Mediation
Offline Charging
Mediation
Balance
management
Real-time
Rating
Rating
Customer Billing
- Retail
- Business
- SME, SOHO
Partner Settlements
- Royalty calcuations
- Revenue share
calculations &
contributions
- Interconnect
Invoice Production
Paper, Online, Usage Statements, Loyalty
Payments
Bill payment,
Top-up Voucher Management
Dispute Management
Refunds, Partial/full
Collections
Overdue reminders, Direct Debit
invitations, Debtor Management
Enterprise
Management
- Financial
management
- Accounts
Receivable
- General Ledger
Partner Relationship Management (Contract, IP, Sponsor, Advertiser, Promoter, Price plans)
Revenue Protection (Revenue Assurance, Fraud Management, Audit and Credit Risk Management)
Revenue Management (Reporting ARPU/AMPU, Customer Lifetime value, Data Warehouse…)
Figure 1: The GBA Map (version 3) – draft for discussion
These KPIs and the associated benchmarking will be
extended to cover all areas of the GBA Map, as shown above,
the goal being to provide the top KPIs for each area.
Revenue protection is an important element of revenue
management and the GBA’s Revenue Assurance and
Fraud Initiative will become a key lynchpin within this
refocused Initiative.
However, revenue management is more than revenue
protection and in recognition of this the GBA’s vision is
to provide a framework that allows operators to actively
manage the performance of their business. Organisations
need to focus on profitability whilst being able to track
subscriber behaviour such that their assets are put to
optimal use.
Revenue management should therefore allow operators to
monitor, control and ensure revenue maximisation within
all of its revenue chains but also to provide the ability to
manage costs associated with service delivery, thereby
providing the ability to manage margins rather than just
focusing on revenues alone.
Finally, to leverage the full potential of revenue
management it should also provide a comparative analysis
of business performance, where business performance can
be tracked at key stages of revenue realisation. Six such
stages have so far been identified:
• Forecast Revenue, based on revenue targets derived
from a company’s business plan
• Predicted Revenue, revenue projections of the
current subscriber based on subscriber profiling
with estimated ARPU and ARMU
• Expected Revenue, derived from actual services
provided in the network as well as actual usage of
those services
• Invoiced Revenue, actual billed revenues
• Collected Revenue, based on revenue actually
received by the company
• Reported Revenue, based on revenue as reported
in a company’s accounts and summarised in the
company’s annual report
In an ideal world all of these revenue stages should give
the same value but of course they never do. For example,
the difference between Expected Revenue and Invoiced
Revenue can in large part be accounted for by internal
fraud and revenue assurance losses, and the difference
between Invoiced Revenue and Collected Revenue by
external fraud and bad debt.
By comparing these key revenue perspectives, revenue
management can determine the operational effectiveness
of an organisation.
Revenue management is set to become a key element of
an operator’s offering of next generation services and a
goal of the GBA is to provide guidance to operators who
wish to establish this critical business process within their
own environment.
THE BILLING JOURNAL | 11

Based on work to date, some proposed extensions include:
Area
Business Strategy & Objectives
Business Process & Info
Management
Product Lifecycle
Management
Customer
Management
Fulfilment
Service Activation
Online Charging
Offline Charging
Customer Billing
KPI
To be completed
To be completed
Time from business approval to service agreement
Percentage of products that make it from marketing department to
market
Number of bills paid online
Average time from order entry to acceptance
Time: order to cash
Percentage of orders completed with zero touch
Percentage of zero touch orders
Percentage of failed activations/deactivations
Average time from order entry to provision of service
Average time from top up to usage
Percentage of default rated calls
Time to suspend an account when zero balanced reached
Percentage of rejected calls
Time to implement a billing change
Number of new bills versus final bills
Number of unbillable accounts
Partner Settlements
Enterprise
Management
Number of invoices/settlements in dispute
Aged debt as percentage of revenues
Percentage of debt written off as percentage of revenues
Partner Relationship Management
Revenue Protection
To be completed
Difference between network usage and billed usage
Number of unbilled services/features
Number of billing accounts on expired promotion
Number/value of stranded assets
Number of fraud cases: detected, active, completed, false positive
Fraud write-off as a percentage of revenues
Recovered fraud revenues
Bad debt as a percentage of revenues
Revenue management
ARPU, ARMU: target versus actual
Average revenue per product (ARPP), Average margin per product
(AMPP): target versus actual
Forecast vs actual vs collected revenues
Average revenue/margin growth per product
For further information, to register your interest in this Initiative or if you would like to actively contribute to this Initiative, please
contact Francesca MacManaway - fmacmanaway@tmforum.org
12 | THE BILLING JOURNAL

From mobile to multi-play: the business foundations
for mobile’s successful evolution
Idan Carmeli, Revenue Management Product Marketer, Amdocs.
Following ever wider penetration of broadband internet and web access (recently
reaching over 280 million connections worldwide), we are becoming ever more
immersed in an information-entertainment-communication experience that is
increasingly converged.
With broadband, we have information practically
at the tips of our fingers; we employ a variety of
communication methods (instant messaging, video
conferencing, email, voice calling, etc.) and get our
entertainment narrowcast to us instead of our plain
old broadcast service. With broadband mobile we
expect all of the above to be available wherever and
whenever we are, at any given time; we are rapidly
transforming into a culture that is addicted to mobility.
Essentially, our mobile customer experience is
evolving to a multi-play mobile customer experience
and naturally we turn to our mobile service providers
to deliver it.
Indeed, the industry is paying heed to its new lifestyle
consumers, and mobile is evolving in leaps and
bounds to be increasingly converged and versatile,
transforming into an enabler of the full multi-play
experience. Beyond making sound business sense
(fixed line and cable service providers’ history shows
that multi-play customers are far less likely to churn
than single-play customers), mobile carriers have much
to gain from delivering the kind of user experience
their subscribers are clamoring for. A crucial question
to ask is how well they are preparing to execute on
this blossoming market demand. A key element of the
answer may be found in mobile carriers’ vision of the
Business Support Systems (BSS) required to enable
successful market execution. Before we consider this
vision and assess its potential impact on the value to
customers, we must first examine the basic elements
of the total multi-play experience mobile users will
expect their providers to deliver.
Firstly, in addition to voice, they will expect their
mobile service to provide instant messaging, video
calls, streaming TV and music, email and web access; in
short, to be their mobile information, communication
and entertainment hub - a digital home away from
home. They will expect full transparency when
switching between fixed and mobile networks, with
cost of access being the decisive factor. On the service
level, they will expect to switch between contract and
prepaid plans at will (based on their financial situation
or preferences at a given moment); to receive advice
of charges for real-time services and spending limit
notifications; and to have access to their balances
and usage statistics from their own devices and other
web-enabled devices - all so they can stay on top
of things. Simplicity and transparency of billing will
also be core elements of service level expectations.
Customers might appreciate the convenience
of having their parents manage their billing
relationships, yet will exhibit zero tolerance for poor
customer service, and will not hesitate to switch
THE BILLING JOURNAL | 13

providers in response to incompetence. They will
expect customer care representatives they deal
with to know all the relevant information in their
usage profiles, and will accept unsolicited offers
and advertisements only if they perceive them as
personalized and value-adding (a recent survey
by Forrester found 78 percent of U.S. respondents
believed mobile advertisments were annoying and
disruptive to their experience, yet Forrester noted
that consumers “might react positively” to campaigns
perceived as driving value). On the experience level,
they will favor style and individuality, but also the
sense of community and sociability that today’s
popular online social networks, such as reunion.com
and facebook.com foster. Finally, again in the spirit
of web 2.0, they will look to add their own personal
imprints on the content they consume and share.
illustrates some of the value points embedded in a
multi-play mobile customer experience.
Even upon brief inspection, it becomes quite obvious
that these value elements rely on multiple service
layers. Usability is primarily an aspect of the mobile
device, while connectivity depends on network
coverage and band properties. Cross-functionality is
the overlaying of additional lines of service on top
of the converged mobile one. Think for example
of mobile voicemail message indicators on the TV
screen. Cross-functionality requires a network layer
that would integrate real-time service elements and
a business layer that would know what to do with
the usage data in the context of billing or revenue
assurance. Inter-operability crosses all service layers,
from the device all the way down to the B/OSS.
Multi-Play Customer Experience
VALUE EXPERIENCE
Connectivity
Usability
Cost/Charge
Transparency
Interoperability
Cross
Functionality
Versatility
Reliability
Relevance
Figure 1: Value elements of the mobile multi-play experience
Facing such demanding consumer requests and needs,
mobile service providers should ensure they have the
mechanics in place to not only deliver the kind of
experience their customers (and future customers)
will be expecting, but also to do it profitably and in a
differentiated and segmented fashion. A good starting
point would be to visualize such an environment,
assess its potential value elements and figure out the
underlying requirements from there. Figure 1, above,
Still, some elements rely more heavily on certain
layers than others. Relevance is an interesting example
of a value element that impacts multiple players in
the value chain (most notably in the framework of
mobile advertising.) Relevance, or context-sensitivity
of service, greatly relies on integration of subscriber
and usage data originating in multiple systems. Since
much of this information is maintained, aggregated
and processed in the BSS, be it in the CRM, mediation
14 | THE BILLING JOURNAL

or billing sub-systems, these systems should form a
critical part of mobile business strategies in the area
of digital advertising.
Cost/Charge transparency, an important aspect of
billing simplicity, is a service property designed to
remove consumer objections to consumption. It
is a well-known fact that adoption of 3G and next
a post-paid customer In such cases, some of the data
required to complete the end-to-end service delivery
may reside outside of the ’normal’ voice billing stream,
requiring a system flexible enough, for example,
to accommodate both rated and non-rated events,
manage cross-service functionality, expose charging
data for customer-facing functions (such as customer
care, self care or advice of charge delivery systems),
Value
Unified Platform
Front End
• Self Service
• Customer Management
• Support
• Ordering
Back End
• Mediation
• Rating
• Invoicing
• Bill Production
• Partner Settlement
Figure 2: Value to customer is driven from within an integrated BSS
generation data services is hindered by confusion
caused by current pricing models. Before clicking
on that friendly Mobile TV icon on the device, a
subscriber often wonders: am I still within my allotted
allowance How much am I really being charged To
alleviate confusion and encourage consumption, the
service provider might deliver an advice of charge to
the handset. This is a relatively simple affair when the
context is prepaid voice; but what if the desired service
is third party content Perhaps it’s an interactive
game, or a mapping utility What if the subscriber is
provide real-time or offline access to the customer’s
billing profile, process post-event indications of
services consumed and accumulated charges, and
invoice the correct billing identities.
Clearly, an extra layer of integration at the business
level must be put in place in order for subscribers
to receive such seemingly simple services. And with
the kind of next generation services mentioned
previously, the complexities involved - hence the
demand for better integration - are expected to
THE BILLING JOURNAL | 15

grow even more. It follows that for proper billing
processes to take place in multi-play service contexts
special attention must be accorded to integration;
not only on the application, device or network
level, but also within the BSS layer. Figure 2, below,
illustrates how the integrated BSS drives value from
within its sub-layers ‘upwards’ to the customer.
Ultimately, integration is the key that drives value
between the front and back end of the BSS, and
onwards from the BSS to subscribers. However, while
full system integration remains the holy grail of service
providers in a multi-play world, it carries major cost
and time implications. Service providers and their
vendors are industriously seeking the most sensible
paths towards unification of business processes and
systems, leading to tangible operational efficiencies,
total cost reductions and, of course, increase of value
to the total customer experience. As they do so,
service providers must bear in mind one of the most
compelling aspects of the story, namely that while
total value to the customer is intangible and difficult
to measure (churn rates are but imperfect indicators)
it is on the whole comprised of numerous smaller
but more measurable elements that can be brought
about via incremental change. A good example would
be Sprint, which recently redesigned its mobile bill to
the benefit of its customers, who now, according to
a company announcement, can enjoy the “benefit
of simplicity”. Facing the task of delivering next
generation services to its customers over its soon-tobe-deployed
WiMAX network, Sprint has already put
the foundations for an improved customer experience
in place - now and in the future.
There is no doubt that convergence and multi-play
strategies cannot succeed when only half done.
Delivering the total multi-play mobile experience and
maximum value to customers will require operators
to carefully plan and strategize the move from a
fragmented landscape of systems, networks and
services, to an ever-more converged one. But time
is not necessarily on their side. Nimble competitors
from both within and outside the industry, leveraging
internet technologies and IP-based service delivery
platforms, are creating increasingly compelling service
offerings, threatening to drive more customers away
from the traditional mobile carriers. The message
to mobile service providers is clear: a multi-play
experience is what your customers are after.
16 | THE BILLING JOURNAL

No strategy without billing
Nicole Thierhoff, Director, Market Strategy & Public Relations, LHS
If one looked at the telecommunications sector 20 years ago it was very
much ruled by the big incumbents offering ubiquitous communications. The
telecommunications landscape has changed a lot since then, from the launch of
wireless networks and the liberalisation of the telecoms markets to the continued
introduction of various transmission technologies.
Even today the market is continuously changing with
consolidation taking place at various levels and new
players, such as Virtual Network Operators, entering the
market at the same time. The pressure of competition is
constantly increasing and this in turn is putting pressure
on prices. But declining prices only allow for small
margins with little or no growth, and competing on price
is therefore not a sound long-term strategy. Carriers have
to think about how to best position themselves and how
to differentiate themselves in the market in order to
grow their customer base and increase loyalty. They are
constantly looking for more sustainable and promising
business models – and need to come up with new
strategies to address the market.
Going forward with convergence
In that respect many network operators are trying to
broaden and enhance their product portfolio by focusing
on so-called triple play offerings. These consist of voice,
data (broadband internet) and video (IPTV, VoD) services
all delivered through a single pipe - at least through the
eyes of the consumer who in the end is only interested
in the convenience of the package and whether it fulfills
his communication needs. Quadruple play expands
these offerings by adding the mobile dimension to it,
the result being a fully convergent communications and
entertainment service package.
Depending on the country and region, the development
status of the infrastructure and the penetration rate for
both mobile and fixed-line services, communications
service providers are following different roadmaps,
or at least have different priorities. According to Booz
Allen Hamilton, triple and quadruple play can be seen
as potential drivers for growth particularly in the highly
sophisticated and saturated telecommunications markets.
In advanced markets such as Western Europe or North
America one finds a lot of triple and quadruple play
offerings from various players such as mobile and fixedline
carriers, cable-TV and Internet service providers.
Big incumbents such as Deutsche Telekom, BT, France
Telecom and AT&T have upgraded, or are in the process of
upgrading, their networks to IP-based networks, providing
them with the possibility of bundling voice, data and
video services. At the same time many have added mobile
services to their packages by re-incorporating their mobile
divisions or partnering with mobile carriers.
Mobile communications service providers on the other
hand are targeting this market by expanding their offerings
with fixed-line services, an example being Vodafone in
Germany. Instead of selling its wireline affiliate Arcor they
changed their strategy and are now focusing on offerings
that include fixed-line services.
Though cable-TV and internet service providers are coming
from different angles, they are going in the same direction.
By acquiring the mobile service provider Virgin Mobile,
cable-operator NTL Telewest, for example, formed one of
UK’s first quadruple play providers. In other regions such
as the Middle East the aim is similar although key aspects
of the delivery may differ. Many initiatives are related to
converging various services on the wireline level. A lot
of customers have multiple fixed-line contracts from a
single provider: one for simple voice telephony, another
one for broadband internet and dial-up services and yet
another one for cable-TV services, for which they receive
THE BILLING JOURNAL | 17

separate invoices even though the service provider is the
same. Convergence in terms of receiving a single invoice
for the different services instead of multiple invoices is an
important issue for this region and necessary in order to
grow and retain the customer base. Carriers are therefore
aiming at converging services at this level. Adding the
mobile dimension and integrating these packages is the
next step.
sophisticated markets of Western Europe and Asia Pacific
prepaid customers are more prevalent than post-paid
– although this differs from country to country. However,
prepaid and post-paid customers expect the same product
options and marketing offerings and thus pre-postpaid
convergence is an essential part of a communication
service provider’s strategy for growth which requires a real
time capability in the billing system.
From the consumer’s perspective, the various services
have been available for some time and simply bundling
the various services is not inherently attractive unless the
product bundle is offered at a lower price than the sum
of the single services. Ultimately the consumer expects
the same services, products of equal quality and the
same level of customer service, for less money and with
a single point of contact and a single invoice. However,
according to Booz Allen Hamilton, the more complex an
offering, the less the impact of the price. Issues such as
customer care and services are gaining importance and
in this context communications service providers could
exit the inflationary spiral and score on service quality and
performance instead.
Going one step forward and taking into account the
different payment methods of prepaid and post-paid
– now the customer’s choice - offerings become even
more complex. In the early days prepaid customers
were understood to be customers with low income or
creditworthiness. They were noted for spending small
amounts and were expected to generate little revenue. This
has also changed and today prepaid is merely a payment
method for various customers with different communication
needs and spending patterns and not necessarily linked to
the average revenue per user. Communication packages
need to embrace the complete range of communication
and entertainment services and have to be available for all
customers independent of the payment method. With new
entertainment services evolving many customers want to
keep control of their budget. The uptake of these services
largely depends on the customer’s acceptance which is not
only linked to pricing but also to cost control capabilities.
Cost control is not limited to prepaid customers any more
but spending control is now an important feature required
by all customers in order to avoid the ’bill-shock‘ at the end
of the month.
Today, with more than two thirds of the world’s subscribers
being prepaid and with this percentage increasing, as
well as representing a huge portion of revenue, prepaid
customers have to be considered important. Even in the
Managing the market challenges
Even though the business models may vary from region
to region, or even country to country, communications
service providers worldwide are facing the same
challenges. They must increase customer retention and
grow the customer base in order to boost revenues.
Knowing the customers and analysing customer data
is more important than ever and a single view of the
customer is a fundamental building block to be able to
tailor the various offerings to the needs and requirements
of these customers. Differentiation is a key element and
in order to differentiate, carriers have to decide which
products and services to offer in which bundles and at
what prices. In that regard customer centricity is the
focal point and the bundling and packaging of various
products and services in combination with market
segmentation is getting more and more important.
Pricing is becoming a complex issue especially for product
bundles and although competition on price has its
barriers it is a marketing tool not to be underestimated.
At the same time cost awareness is gaining importance
for communications service providers, where a huge
portion of the cost pool is related to the IT-infrastructure.
In the past communications service providers have been
using many different business and operational support
systems resulting in a complex and expensive business
infrastructure with multiple processes and systems. Today
with convergence happening at various levels - at the
business level and in the service offerings - carriers are
looking to integrate these processes and systems to reduce
this complexity and drive down capital and operational
expenditure. Business consolidation and centralisation of
the business infrastructure has become an imperative.
Billing more strategic than ever
Yet the best strategy is useless without putting it into
operation. Customers expect any service to be available
from any network and device at any time, independent
of the payment method. In that context business support
systems have always been an essential building block and
today are more strategic than ever. It is especially the billing
18 | THE BILLING JOURNAL

and customer care systems that allow a communication
service provider to convert the strategy into appropriate
offerings and thus turn it into business value which in turn
means generating cash. Whether you are talking about
a single level of convergence, for example pre-postpaid
convergence, or complete convergence at all different
levels, marketing teams must be able to define the various
products and services, bundle them and apply a price
tag to them. Often communications service providers are
facing limitations of their legacy billing systems in terms
of product flexibility and time to market. Products have
to be marketed and promoted to different customers,
depending on different criteria. All services, whether
voice, data, content or video services, whether fixed-line or
mobile, whether prepaid or post-paid need to be reflected
in the billing system and above all, be billed. In the end the
invoice is a major communication tool to customers not only
providing pure account information but promoting new
products and services based on personalised information.
Thus a fully convergent real time billing system not only
helps to save capital and operational expenditure but also
helps to increase revenues by promoting new offerings.
Even though full convergence with its different attributes
has not yet been achieved, many communications service
providers are looking for billing systems supporting
their plans for convergence and business consolidation.
Carriers have to decide which strategy best suits their
specific environment but it is the billing system that
actually enables and supports the strategy and in the
end turns it into business value, which is essential for any
business to survive.
THE BILLING JOURNAL | 19

Realising real-time charging opportunities
Jaco Fourie, Director for Business Development and Strategies for Revenue Management, Ericsson
Real-time charging differs from non-real-time charging. Among other things, it is an
integral, ongoing part of the service, not an after-service activity; it does not handle the
aggregation of information; in converged networks each user will have several different
identities and it must accommodate different classes of service and content.
Background
In the early 1990s, operators in the UK attempted to offer
a credit-limiting service (stopping users from spending
more than a predefined limit) that processed Call Detail
Records (CDRs) as they arrived from the network and
blocked service when customers reached their credit
limit. The service was unsuccessful, however, because
processing was delayed - sometimes up to several days
- and thereby failed to fulfill user expectations and
service providers’ objectives.
In 1996, prepaid services emerged as a Value-Added
Service (VAS). At that time, many people in the
industry saw these as yet another ‘phase’ but in reality
prepaid services helped revolutionise the way in
which the industry does business. Prepaid services
have accelerated growth in the industry and currently
provide the main source of new subscribers (75 percent
of net subscriber additions). At present, 64 percent of all
mobile users have prepaid subscriptions.
Today, prepaid subscriptions are no longer considered
a VAS. Instead they are one of two payment options
enabled by an underlying real-time charging
environment. This environment, however, has presented
the industry with a number of challenges, in particular
because no standards had been defined for it. As a
result, many different approaches have been tried,
including SIM-based applications, call trunking nodes,
and Intelligent Network (IN) implementations. The
problem is not only one of standards, however; there
is also the issue of how charging is to be handled in
real-time (real-time charging broke all established rules
governing charging and billing before the introduction
of prepaid services).
Before the advent of prepaid services, only non-real-time
mechanisms had been defined for charging in existing
standards. An interim approach was needed. In 2000,
the IN approach was adopted as the de facto standard
for managing real-time, prepaid voice services. This
solution fell short for non-voice services, however, and
one additional approach emerged - service-charging
nodes. The use of service-charging nodes to handle
charging on behalf of service nodes in the network
introduces other complications.
The nature of real-time charging
Real-time charging differs from non-real-time charging:
• It is an integral, ongoing part of the service, not an
after-service activity. As such it must be aware of,
and facilitate, all relevant interactions to permit
charging and supervision.
• It cannot handle the aggregation of information;
that is, one cannot first gather information from
multiple network elements and then calculate a
cumulative charge.
• In converged networks, each user will have several
different identities. Therefore, when a service is
to be used, multiple identities must be resolved
against one account.
20 | THE BILLING JOURNAL

• It was not standardised until 2005 when the 3GPP
IP Multimedia Subsystem (IMS) standard was
defined.
• It must accommodate different classes of service
ranging from the bearer to service (for example,
SMS and MMS) and content. Service providers
must be able to price usage in ways that are
acceptable and understandable for users and at
the same time create healthy margins.
With these differences in mind, a real-time charging
mechanism was defined together with a process for
assessing charges for specific services. The real-time
charging network contains two main components:
serving elements, which deliver the service to the
user; and charging control, which identifies the service
and user, calculates the charge, and updates the
subscriber account according to the service provider’s
business rules.
In this model, a serving element must be intelligent and
able to interact directly with charging control over an
efficient charging interface – Diameter. A third element,
business support, invoices post-paid subscribers and
performs other enterprise-specific functions, such as
managing the General Ledger and Accounts Receivable.
It also logs and stores a history that can be used for data
mining (market research) and to provide detailed usage
specifications for any user.
The diminishing role of IN
In the IN model, the Service Control Point (SCP) and
Service Switching Function (SSF), part of the Mobile
Switching Center (MSC), work together to form a
serving element. IN was designed for call-completion
services, not charging. Although it is the de-facto
charging standard for real-time voice in present day
networks, it is not the mechanism of choice for future
networks, such as the IMS and broadband access
networks. Instead, serving elements interact directly
with charging control over the Diameter protocol.
Based on the information they receive from charging
control, serving elements can thus control the delivery
of service including voice service. This real-time charging
for all capability has been introducted in the mobile
MSC, eliminating IN for charging voice calls and freeing
up IN switching resources in the network for services
like Virtual Private Networks (VPN) and ring-back tones.
In the case of VPN, the IN VPN service is considered a
serving element that interacts directly with charging
control to enable real-time charging. IN CAMEL is still
Figure 1: Example of serving elements, charging control, and Business Support in the context of
video streaming charging.
THE BILLING JOURNAL | 21

the most efficient way of handling voice charging when
subscribers roam to other networks.
Serving elements, charging control, and Business
Support Systems (BSS)
A serving element, which is a direct link between user
and network, monitors quality of service (Figure 1).
When a serving element sends charging information
to charging control, a rating function evaluates the
information and, based on account type and settings,
sets a price for the service. Charging control provides
the serving element with details that enable it to control
service delivery.
The user communication function in charging control
informs users immediately after service usage about:
• The actual cost of the service;
• Bonuses (if they have received any); and
• Current account balance
In the context of WCDMA and GSM, this communication
is typically handled via Unstructured Supplementary
Services Data (USSD).
The central charging control functions are common for
all access networks, resolving for example, user identities
provided by the access networks. Therefore, the serving
elements need only be able to charge in real time and
communicate with charging control over Diameter.
Flexibility to offer the right prices
In modern networks, different services are stacked on
top of each other in order to realise end-user services
(Figure 2). Service providers must have the capability to
price the delivered services flexibly and in ways that are
acceptable for users whilst creating healthy margins.
Peer-to-peer MMS, for example, requires underlying
GPRS. Music services also require underlying GPRS so
that users can browse a catalogue of available songs.
The same GPRS session might be used for sending and
receiving person-to-person MMS. In addition, MMS
can be used as a means of delivering a song when
the user has made his or her selection. The charging
infrastructure and rating rules must thus know how to
identify different services and charge (or not charge)
for them. At this point, packet-inspection technology
plays an integral part in enabling network charging,
making it possible to monitor the bearer (which is
common for many services) and ensure that data to
and from various destinations is, or is not, charged
for. In IMS, the role of the packet-inspection function
has been extended to enforce service requirements.
The function makes certain that sufficient bandwidth
is made available for a particular service, thereby
guaranteeing good user experience. Also, because
control and payload are separated in the IMS
network, the function makes certain that the
requested service and actual usage match.
Evolution towards real-time charging
A clear trend in the industry is to employ real-time
charging for high-value services in order to limit
operators’ risk of financial exposure to third parties.
More and more operators are thus migrating their
charging infrastructures toward convergent, real-time
charging. IMS is the first solution to integrate real-time
Figure 2: Stacked services
22 | THE BILLING JOURNAL

charging from the outset (real-time charging was a
main requirement of IMS design).
Many operators will probably continue to run
existing networks with existing charging and billing
systems but will implement modern, convergent,
real-time charging systems for their IMS networks.
Initially, they will invest in and deploy a scalable
and flexible charging-control function, integrating
it with BSS. They will then evolve the serving
elements in the service network and connect them
to charging control.
designed with real-time charging in mind – it was added as an
afterthought. The only standards existing for authentication,
authorisation and accounting purposes are:
• RADIUS (non-bidirectional protocol); and
• Diameter (bidirectional protocol that enables
online real-time charging).
Figure 3. Real-time charging enabled user notifications increases user satisfaction and drive usage.
Benefits
Regardless of payment method, end users will benefit
from up-to-date information on charges and fees for
communication and media services. In other words,
they will have vastly improved control over spending.
At the same time, service providers can protect their
bottom line by limiting service (voice as well as thirdparty
content) to users who can afford it. Operators thus
have greater control over credit. Real-time charging
makes it possible to inform users of service costs and,
more importantly, the bonuses they have earned. This
kind of customer intimacy, which is unrivaled in other
industries, is an extremely powerful asset that can be
used for building trust and closing the gap between
service providers and subscribers (Figure 3).
Standardisation
Many different approaches to real-time charging have
been tried since 1996, but most have failed because
the standard on which they were based had not been
Ericsson pushed for the specification in IETF of a
Diameter credit-control application (DCCA) that runs
on top of the Diameter base protocol. The idea is to
make the application flexible enough to allow servicespecific
specifications, in order to accommodate realtime
charging. 3GPP has adopted Diameter and DCCA
(RFC 4006) as the base for all charging standardisation.
Numerous service-specific specifications have since
been defined to cover 2G network services, such as
MMS, and every conceivable IMS service.
Conclusion
The mechanism for managing charging in real time
differs fundamentally from non-real-time charging,
which is to say the old rules for charging no longer
apply. Real-time charging has come to stay, enabling
service providers to offer all-new services to any
subscriber, regardless of payment method or wallet
size. Convergent charging and billing solutions must
thus function in real time. The end-user experience can
be greatly enhanced, for example, through real-time
account information on charges and cross-service
bundling and promotions. Standards have been
defined and are being improved to enable charging
for all kinds of services in an all-IP network.
THE BILLING JOURNAL | 23

Voice 2.0, the future of billing -
and what it means for BT
Alex Leslie, editor of the Billing Journal met Jonathan Jensen, Billing Strategy and Vision Manager at BT
AL: Where do you see billing in, say, five years’ time
JJ: To answer that, I think you have to step back a
little and look at where the innovation is coming from.
You have to look for the innovation that is beginning
to emerge now. One concept that we are looking at is
Voice 2.0.
AL: What is that
JJ: Voice 2.0 is a term for a loosely defined set of
technologies and ideas that let people transmit voice,
data, video and instant messages via IP, anytime, from
anywhere. It also implies a world where users will have
much greater control over who they communicate
with and how and when. Voice 2.0 comprises concepts
like convergence, control, presence and relevance.
As you know we are currently rolling out our 21st
century network and one of the things that this will do,
as an example, is allow us to deliver higher IP bandwidth
into the home that supports both voice and data, i.e.
faster broadband. Another application would allow a
call to be delivered to both a fixed line number and
a mobile number at the same time. This has obvious
benefits, but overall I think it is about giving control to
the customers.
AL: We have talked about customer control for a
while – I believe someone even started talking about
Customer Managed Relationships at conferences. Can
it become a reality
JJ: I spend some of my time looking at niche service
providers. These SPs tend to be where a lot of new ideas
are coming from and as they often become mainstream
I’m keen to understand what their ideas might mean
for billing. These ideas also have to be looked at in the
context of the challenge for BT to be able to provide
services, including billing and payments that meet the
requirements of all our customers.
One interesting company at the moment is
GrandCentral, in the States. They provide the customer
with control over how they manage their inbound
communications across multiple devices with multiple
service providers. They provide a single number, and
you go to their portal and choose where and how your
calls are delivered, if they should be screened, filtered
by CLI; are they business contacts, or friends and family
and how voice mail is delivered.
You can also switch a call between your mobile and
fixed line while on the call, for instance if you walk into
your office, and then you can start recording the call at
the touch of a button. Again, things that we have been
talking about for a while. Now they are happening.
AL: So, it is about switching from a network choice
about how calls are delivered, to a customer choice
JJ: Absolutely. And if you combine control, presence
and relevance into the equation even more interesting
things are possible. For instance, you could get the
‘call’ itself to automatically check whether the person
being called is available, by checking their diary. This
would be based on rules about who was calling. This
gives control to the recipient, uses presence based on
where they are and relevance based on who’s calling.
Apparently less than 20 percent of calls result in a
24 | THE BILLING JOURNAL

human being actually answering them, so it seems to
me that there should be better ways of doing things.
Should a call be delivered as a message, for instance
if the recipient is in a meeting Iotum in Canada has
developed an add-in for BlackBerries, that allows you
to see the status of other people in your contact list
so you can decide whether to contact them – similar
but more sophisticated than the basic presence
functionality in Skype.
The challenge for us at BT is to support all kinds
of customers.
AL: And you are threatened by the new players, such
as GrandCentral
JJ: These companies certainly present a challenge
and they are helping to stimulate the market, They
can pick their target customer segment and address
that alone and because their model is about free
basic service, with premium services being paid for by
subscription, they challenge existing pricing models.
Being separated from the network operators gives
their customers a choice of operator in terms of who
they source fixed and mobile communications from.
However BT has the advantage of being able to offer
an end-to-end solution which appeals to customers
who are looking for simplicity.
AL: So, back to billing. What do these kinds of
innovations mean for billing and the bill
JJ: I think that event based charging will be
marginalised. I think the most common form of billing
will be subscription based, although there will be
some events that need to be charged for, some off-net
calls and premium events like films for instance. Billing
will still be needed, but will evolve into something
different from its current form. If you look at payments,
we now have half our customer base on direct debit,
and a good percentage of those are actually on
monthly payment plans, which means that the bill is
now actually a statement, not a demand for payment,
for those customers.
JJ: Perhaps the question is; which allows you to
improve the billing experience You remove the need
for the bill to be a demand for payment. Events on bills
make the amount due fluctuate, which drives traffic to
call centres, which drives up the cost of billing.
AL: The cost of billing – a major focus of the billing
manager’s life.
JJ: Indeed, second only to the ‘customer experience’ both
of which are key in BT. You have to balance the two.
AL: How do you go about reducing the cost of billing
JJ: As I mentioned, one way is to eliminate the ‘activity’
caused by event based billing and move to a subscription
model. We are also looking at new ways of taking payments.
Increased focus on electronic payment methods. IVR
systems are good at accepting payments, for instance, and
obviously cut out some costs. There is a big opportunity in
the online area, but uptake is slower than we might wish.
Another way is to eliminate errors, and shorten
processes. We are constantly trying to achieve that.
AL: What about outsourcing
JJ: We have outsourced some functions but that is a
small part of our agenda. BT is a global company with
a people presence in every continent so we tend to
think in terms of Global Sourcing. That means we can
reduce costs by exploiting BT’s international footprint
while continuing to place the customer experience at
the centre of our strategy.
AL: What about Skype An old question perhaps, but
do you see them as a threat
JJ: I question Skype’s current strategy, actually. If you
look at some of their SkypeOut rates, BT’s are lower, and
I do wonder about the direction they are taking. Having
said that they are still a competitor, of course, and will
continue to challenge operators like BT. However BT
is well placed to manage the challenge with its own
portfolio of VoIP products like Fusion which brings
together VoIP and mobile.
AL: Which allows more flexibility
AL: So, in your view voice is not dead Many people
THE BILLING JOURNAL | 25

for many years have been predicting the end of voice
as a major revenue stream, and the rise of content.
JJ: Voice is not dead, but the way we charge for it will
change. For many customers it will become part of a
wider bundle of services, charged for on a subscription
basis. But still a key part of the overall customer
experience.
AL: And the bill will be a major tool to make that
happen
JJ: I believe so, if we can move away from this barrier
that the bill is a demand for payment. If we can
remove that, then the bill becomes about information
management. And we can move from the ‘one size fits
all’ model, to a model where the customer can tailor it
to meet his own requirements if he wants to.
Subscription billing takes away a lot of the uncertainty
around ‘what will my bill be this month’ and that
question becomes a greater issue as more products
appear on the same bill.
Ultimately the bill may become a value statement –
and obviously it will increasingly be online, although
BT will of course continue to support paper bills for
customers that prefer them.
And once you have achieved that separation then the
potential to use the bill as a marketing tool is greatly
increased.
AL: Thank you, Jonathan, that is an excellent insight
into where things are going.
Editor’s note: the result of the recent GBA survey ‘event
based or subscription’ came down slightly in favour
of ‘event based’ (58 percent), but it must be said that
100 percent of vendors who took part voted ‘event
based’. One has to wonder whether this is a new
dividing line between operators and vendors.
26 | THE BILLING JOURNAL

Recipe for success in a world of hyper competition
Grant F. Lenahan, Executive Director, Telcordia Service Delivery Suite Marketing
Tom Forsyth, Director, Telcordia Hosted Solutions Marketing
Service revenues – short term challenges; longer term opportunity
Service revenues and margins are under downward pressure for traditional
services such as POTS, mobile voice ‘broadcast’ video and undifferentiated internet
access. Much of this downward pressure comes from the very fact that the new
networks being built-out by fixed, cable and mobile companies allow them to
enter each others’ markets (e.g.: VoIP over cable, video over broadband), increasing
competition and driving down prices.
There is significant good news for struggling operators. By
offering bundles of voice, data and video, each can address
a larger overall market and generate larger monthly ARPUs.
More importantly, new IP-based networks open the door
to an entire range of new services, from digital content to
financial transactions to advertising. Many analysts report
the revenue opportunity in digital content and advertising
to be larger than today’s market for voice, data and
messaging services. Consequently the raw opportunity
exists to significantly grow revenues and monetize the
capital investments in broadband and 3G networks, but
this opportunity demands a new service paradigm – one
in which operators focus on the delivery of interactive,
targeted, personalized services.
The basic transition facing the telecoms industry parallels
the changes in the global economy. Many industries have
evolved over the past decade or so from the traditional
focus on ‘mass production’ to a new paradigm of ‘mass
customization’. In effect, flexible manufacturing has
made it economical to make products that are targeted at
individual niche markets.
a niche model to be profitable today. A similar trend has
occurred in retailing and distribution, where companies
like Amazon, DELL, Apple, and Home Depot have built
successful businesses based on huge consumer choice
and even customized configurations.
Ultimately, the ‘new economics of niche marketing’ is
summed up in the popular notion of the ‘Long Tail’. The
Long Tail basically states that a large proportion of demand
comes from niche, often personalized, goods and services
Sales Volume
The Marketplace
Basic
Services
Niche
Services
Personalised
Services
One highly visible example is the auto industry, where
flexible manufacturing has made it cost effective to create
a wide range of specialized models, based on a smaller set
of common components. In the auto industry, ‘economic
production runs’ have fallen from a typical range of
100,000-300,000 30 years ago, to as little as 5,000 units for
Variety
Body
Long Tail
Figure 1: The long tail – applied to telecoms
THE BILLING JOURNAL | 27

that consumers buy as an adjunct to a basic service – such
as mobile telephony or broadband communications. One
illustrative data point sums it up succinctly: Borders, the
well known US book shop, stocks approximately 150,000
book titles in its largest stores. Amazon, on the other
hand, generates over 50% of its revenues from titles that
fall outside the top 150,000. Clearly we are in a world of
customized products and services. Telecom companies that
are able to offer attractive, well-targeted and rich services
will win market share and it is likely they will be able to
defend higher price levels and margins for their services.
Their products will be less commoditized and, therefore,
the propensity for customers to churn for a lower price
will be reduced. Most importantly, they will have made
the transition from ‘operating networks’ to ‘innovating in
new services’ – which will fundamentally place them on a
trajectory to increase service revenues over the long term.
• These systems must have the flexibility to react to
developing market opportunities – we will NEVER
be able to predict the future with precision
• The ‘smart network’ of tomorrow must interact
with end users in real time. Real-time interaction is
a requirement in order to deliver truly customized
content, advertising, and user experiences, as well
as the only way to enforce spending limits, parental/
enterprise control and DRM.
• We can’t wait until nirvana arrives. Far too many
technology gurus talk about the day when IMS
will provide all this flexibility. Hopefully it will, but
the most innovative companies are delivering
customized, interactive experiences today. Just look
at Virgin Mobile USA and Disney Mobile.
What we know about the future is: that services will be
far more numerous; that consumers (and enterprises) will
demand more customized services and rate plans; that
digital content will become an ever-increasing proportion
of our industry’s revenues; and that both fees and
advertising will be used to pay for services. Beyond that,
predicting exactly what services and exactly which digital
content will sell becomes fuzzier.
This leads to a recipe for success:
• Operators need to separate ‘services’ from ‘networks
and facilities’ in their thinking, operations and
organizational structures.
• Operators must focus on market needs at a
more granular level – seeking niches that let
them deliver more personalized, and thus highly
valued, services.
• Operators must deploy more services and content.
This involves business tasks (such as securing well
thought through content distribution relationships)
as well as technical tasks (such as developing
product catalog systems, subscription systems, and
highly flexible content charging capabilities).
• The industry must migrate from hard-coded OSS,
BSS and service platforms to architectures that
enable fast, inexpensive deployment – both of
new services AND the operations processes that
support them.
This may look like a daunting list, but in reality it simply
articulates the need to identify market opportunities for
services, and put in place a sufficiently efficient and flexible
infrastructure to deliver those services. It dictates a mindset
change from ‘mass production’ to ‘mass customization’,
and from carefully (and slowly) planning for new services
to agile reactions to the market.
The emerging market for communications is hypercompetitive,
with competition from traditional, emerging
and web-based firms. In this environment, it is essential to
create truly compelling offers and to extend these offers
to all your customers – whether prepaid, post-paid or the
emerging sweet spot of ‘hybrid’ accounts. Historically,
neither prepaid systems nor post-paid ‘billing’ systems
offered this level of flexibility. Prepaid systems have
been limited in their ability to support more innovative
offers, while post-paid billing systems lacked real time
capabilities – which are essential for prepaid, as well as
all the new exciting interactive features required for the
next generation of entertainment, TV, music, content and
value-added services. The new generation of charging
infrastructure, therefore, must be both.
There is a new interactive world emerging and internet and
media players are changing the rules of the marketplace.
These internet and media players are targeting the global
marketplace with internet-based community services, and
are rapidly entering the telecom and mobile marketplace
with alerts, enhanced IM, streaming media products
and yes – even VoIP. These new services and businesses
are being created with a fraction of the investment in
28 | THE BILLING JOURNAL

the global CAPEX of today’s telecom business, yet these
new internet companies have market valuations that are
starting to exceed the established telecom players. This
challenges the ‘old rules of investment in today’s telco’s’
and drives the urgency to increase the focus on the service
delivery engine for next generation services.
Delivering a truly interactive experience places high
demands on your network and services infrastructure. Like
IN or IMS based prepaid, every call or data session must be
processed in real-time, in milliseconds, and with absolute
reliability. To put this in context, for even a modestly large
operator this may equate to more than 30 billion calls and
sessions processed annually! Therefore, an interactive
Interactive Network
Interactive Business
Advertising
Content
Media
TV
Partners
Interactive
Service
Control
Interactive
Policy
Control
Customers
Interactive
Charging
Interactive
Options
Suppliers
CRM
Billing
Prepay
Self Care
Hosted solutions for MVNOs & MNOs
Interactive Access
Figure 2: Interactive Service Delivery Framework
Telcordia’s Vision for next-generation Interactive Services
is based on a Service Delivery Framework (SDF) that
enables our customers to create a customer-centric, realtime
and personalized experience - and do so with the
same cost efficiency and speed wielded by internet based
competitors. Our belief is that a successful service delivery
infrastructure is based on twin pillars: a flexible service
delivery environment to create and deliver services, and
an equally flexible OSS environment to manage the service
lifecycle at a similar ‘internet speed’.
Figure 2, above, illustrates the basic relationship between
customers, services/content and, in the center, a valueadded
network and service provider. For a typical web
service today, that center box is largely blank, and the ISP
(telco) offers no differentiation and, therefore no added
value aside from transporting bits. However, this is where
essential personalization takes place. It is where customized
charging takes place, where subscriptions are enforced,
where preferences are maintained, where allowances
and usage limits are enforced and where promotions and
sponsorships are delivered. In essence it is where generic
services are personalized – on an interactive basis. The
three most important and widely applicable capabilities
are charging, policy and custom service logic (often called
service creation).
service delivery solution must be highly reliable, highly
available, must scale almost infinitely and must have a cost
per call or session that is a tiny fraction of its value.
There’s one more lesson we can all learn from the internet
firms and the MVNOs. Innovators from outside the telecom
industry often have service concepts and insights into
specific markets or services that network operators lack.
Furthermore, once a service is up and running, it can be
introduced into a second network – or modified to create
a unique new service – more quickly than it could be built
from scratch.
Every chain has its strong links and weak links. As an
industry we’ve already sunk hundreds of billions of
dollars into developing strong links for the costliest
parts of our next generation infrastructure. Now it’s time
to invest in next generation SDFs and OSS/BSS that will
transform the industry from ‘facility based utilities’ to
‘market based innovators’.
THE BILLING JOURNAL | 29

Towards payment solutions for mobile commerce
Patrick Métaireau, Senior Product Manager, eServGlobal
Mobile commerce presents opportunities for operators to increase
revenue by selling more products and services, generating more
transaction commissions and increasing network traffic. Mobile
commerce will require new payment solutions to make it easier for
customers to add credit to their accounts and to purchase goods
using their mobile phones.
Why mobile commerce
Mobile commerce means that goods can be purchased
or services charged against the mobile account or to
an external payment facility. It creates an alternative
money transfer system which is easy and convenient for
customers and does not rely heavily on the established
banking infrastructure. Some applications of mobile
commerce will enable customers to conduct banking
transactions without having a bank account, for example
bill payments and funds transfer. As such, it represents an
exciting growth area particularly in markets where there
may be less existing infrastructure, or where customers
have a low uptake of banking services.
Mobile payment includes ‘hard’, ‘soft’ and ‘distance’
commerce:
Soft commerce is the activity of buying digital goods to
be used on the mobile phone, for example ring tones
and icons.
Distance commerce is the activity of buying physical
goods or services for later delivery. Examples of this are
online shopping and paying utility bills.
The greatest proportion of mobile commerce
transactions are likely to be a large number of small
payments, i.e. parking meters and public transport.
The most profitable areas, according to Arthur D
Little [1], will be mobile insurance, mobile gambling
and transportation (ticketing). The biggest growth
markets with a high ratio of prepaid customers are
China, Indonesia and South America.
Hard commerce is the activity of buying goods or services
at the physical point of sale. This can be done through
either manual or automated transactions. The transaction
is manual if there is a vendor, or automated if there is
no vendor, i.e. purchasing from a machine. Examples
of hard commerce transactions include paying for pizza
deliveries, shopping, using parking meters or buying
items from vending machines.
30 | THE BILLING JOURNAL
A growing use of mobile payments is in the area of
international remittances. Money transfers from migrants
in developed countries, to friends and family in their country
of origin, are carried out by people who often have lower
access to banking services and so are a target demographic
for mobile payment solutions. It is also expected that these
international remittances will cost less for customers than
traditional means via banks or post offices.

For example, according to the Informa Telecoms and
Media report “Global Mobile Prepaid Strategies 6th
Edition” (2006), Globe Telecom in the Philippines has
taken advantage of the high prepaid SMS penetration to
launch a non-banking payment service to transfer money
internationally, where all transactions are conducted by
SMS and the operator earns revenue on a per transaction
basis and on SMS traffic.
Mobile payments can be also used for:
• Purchasing goods and services
• Micro-loans
• Tax payments and other bill payments
• Peer-to-peer e-money transfer
• Remote prepaid re-loading
• Donations.
The benefits of mobile commerce include making
purchasing easier for consumers by removing the need
for cash (i.e. vending machines, parking meters) or by
providing another means of making online purchases
- useful if customers don’t feel secure using their credit
card or don’t have one. It provides an alternative form
of payment using a device the customer is familiar with.
Mobile payments remove the need for customers to have
a bank account, allowing more flexible payment options
whether for shopping or purchasing services, in countries
where there is not a widespread or well-established
banking infrastructure. Mobile payments are well suited
for micro-payments below ten euros.
The mobile commerce market is not yet mature and
as such it has not reached profitability. The drawbacks
include a lack of inter-operability and slow uptake with
the older generation of customers.
However, mobile commerce will allow merchants to gain a
competitive advantage if they are early adopters. Mobile
commerce could increase sales and may also reduce the
impact of credit card fraud. Customers will benefit from
the high potential for ease of use and greater security.
What role for operators in m-commerce
Mobile operators are well positioned to take advantage of
the huge potential for mobile commerce. Operators have
established relationships with a large customer base who
trust them to deliver the core communication service.
Mobile commerce can be delivered either to prepaid
customers where the payment required is deducted from
existing prepaid credit, or to post-paid customers where
the payment is added to the monthly bill.
Mobile commerce will allow operators to leverage their
existing infrastructure, as the payment systems and
methods for receiving payments are already in place.
Prepaid customers are familiar with recharging their
prepaid accounts and both groups of customers could
theoretically have access to a Stored Value Account (SVA)
product. This would enable the customers to engage in
mobile commerce activities.
Operators can move forward to mobile commerce either
by providing the basic transmission network and/or
the payment mechanisms or by becoming a virtual
bank. Note that no universal legal framework exists
but depending on the country, a banking licence may
be required to host a customer’s SVA. The more valueadded
the option, the more revenue can be generated.
Operators can also choose to provide an extra layer of
services to their clients either by selling related services
such as WiFi access, which could be paid for by SMS out
of prepaid credit, or by entering partnerships with thirdparty
retail providers.
Operators can play one of three possible roles in
m-commerce:
1. Provide the basic transmission network used by
other parties to provide their services. For example,
mobile banking where the mobile handset is used
for contacting and effecting payment with the
bank but the transactions are controlled by the
bank interface.
2. Provide the enabling technology, i.e. the payment
mechanisms. For example customers may buy a
premium rate service, the payment for which is
then passed on to the merchant by the operator.
3. Become a virtual bank by providing direct transfer
or direct-to-bill payment methods. Direct transfer
consists of debiting the customer’s SVA to pay
a merchant, as done by Globe Telecom in the
Philippines. This payment method targets prepaid
or hybrid subscribers. Direct-to-bill consists
of aggregating purchases on the subscriber’s
monthly bill. This payment method targets postpaid
subscribers.
THE BILLING JOURNAL | 31

Enabling the customers to transfer funds to other
mobile customers, rather than simply paying
merchants, has implications for international
remittances and transfer of airtime credit.
The latter two methods can be provided under the
operators’ brand, extending the range of services provided
to customers. Customers can then graduate to become
customers of additional products using the same mobile
phone interface. This will increase network traffic and it
will further increase revenue depending on what level of
value-added services are delivered to the customers.
Regardless of whether the operator provides the service
that the customer is paying for, the operator can retain
value if they are involved in the charging operation – for
example if they hold customers’ cash, or they can provide
reports or settlements.
How does m-commerce work in practice
There are a number of different scenarios for m-commerce
based on a SVA operating from a prepaid platform.
Cash In
The customer puts funds into their SVA while at a physical
merchant location. The customer gives cash to the
merchant to add to the money in the SVA. The merchant
initiates the transaction. Credit is transferred from the
merchant’s account, held by the operator, to the customer
account. When the cash is successfully received in the
account the merchant and the customer are informed.
On-portal
Customers can purchase goods and services supplied
by the operator. These may be core telecom services, i.e.
airtime, SMS or MMS services, or they may be additional
value-added services such as ring tones or handsets. The
customer can initiate payment directly from their mobile
phone or using an online interface which deducts funds
from the SVA. ‘Soft’ goods are delivered immediately (i.e.
ring tones) or the operator may partner with a third-party
to supply physical goods.
Off-portal
This refers to purchasing any goods or services not
provided through the operator’s interface, i.e. online
shopping on a third-party website, purchasing items in
a shop or purchasing services via SMS - typically digital
content, parking tickets, or vending machine items.
To buy goods while physically located in a merchant the
customer selects goods in the store, is given the bill and
authorises payment from the SVA. In some cases this can
be done by scanning the mobile phone via a device which
detects the account.
Bill Payment
Paying for utilities, for example an electricity bill, can be
done one of two ways. Either the customer can give
cash to the merchant who will convert this into stored
credit and transfer the credit to the account of the service
provider, or the customer can initiate payment directly
using their SVA. Once payment is completed the payment
request will be delivered to the billing system.
Peer to Peer Transfer
Customers can initiate the transfer of money from their
own SVA to other customers’ SVAs.
Cash out
This allows the customer to convert part of the credit in
their SVA into cash. The customer can get cash from their
SVA when physically in a store. The merchant initiates the
transaction. Cash plus the relevant fee is transferred from
the customers’ SVA to the account of the merchant held
by the operator. On successful transfer, the merchant and
the customer are informed. The merchant then hands
over the cash to the customer.
Payment Methods
The payment system behind m-commerce can either be
through SMS, Unstructured Supplementary Service Data
(USSD), IVR or Web. For instance the customer sends an
SMS which identifies the service and the amount to be
paid to a short code and is given the goods/services,
usually with an SMS-based confirmation.
USSD is a mobile phone interface which has a web ‘look
and feel’, based on browsing menu options. This gives
customers a great deal of flexibility and allows operators
to expand the number of interactive services they offer
their customers.
IVR is the best known way to interact with the system to
top up a prepaid credit account. It identifies the subscriber
who can perform an m-payment by entering the product
or service identifier and the amount to be paid.
32 | THE BILLING JOURNAL

Merchant
Merchant
Cash In
Cash out Bill Payment
Peer to Peer
Transfer
Subscriber
Merchant
Off-Portal
Goods purchase
Airtime
SMS
MMS
On-Portal
Telecom
Goods purchase
On-Portal
Goods purchase
Prepaid
Solution
Mobile POS
E-Wallet
M-Payment
Solution
Web will be the natural interface for on-portal payments.
The customers will be authenticated by entering their
MSISDN and PIN code. They could also potentially receive
a confirmation SMS on their mobile phone to increase the
overall security of the transaction.
More Recharge Options Are Required:
E-retailer Management
SVA’s can be recharged through a number of different
methods. In order to provide all these transaction
scenarios the challenge for operators is to provide as wide
a range of payment options as possible.
Voucherless recharging also reduces costs and eliminates
any loss due to voucher theft. Real-time transactions
allow payments to be processed instantly and funds to
be available as conveniently as possible for customers.
Mobile commerce is a fast-evolving area with great
potential to expand. Offering customers easy mobile
payment options to add credit to their account and to
purchase goods using their mobile phones will encourage
the growth of mobile commerce, resulting in greater
network traffic and therefore increased revenue.
Retailers have the ability to recharge any prepaid
customer MSISDN account from a qualified operator
without the need for vouchers. This allows operators to
manage and expand their own distribution networks.
(Footnotes)
1 M-Payments Making Inroads, Arthur D. Little Global
M-Payment Report
THE BILLING JOURNAL | 33

Converged billing – myth versus reality
Howard Woolf, Group President, Comverse Converged Billing
The opportunities in the new world of convergence are
enormous. But so are the risks. When it comes to choosing
a convergence strategy operators must be able to separate
fact from fiction, myth from reality. The future of their
business may depend on it…
More and more communication and content providers
are embracing convergence – be it network convergence,
service bundle offers, prepaid/post-paid convergence or
even system consolidation. The move to convergence –
driven by market changes and customer demand - is an
exciting new area of business transformation. It’s an area
with enormous potential – but also enormous risks.
One wrong move and operators can find themselves in
a technological dead-end with system limitations that
can jeopardize the business through crippled customer
relationships or disrupted revenue streams.
To avoid these pitfalls operators must be able to
strip away the market hype and candidly evaluate
today’s convergence realities. They cannot afford to be
misguided by common myths in the telecom
marketplace about what a convergence platform is
or how it should be deployed – myths that can be
dangerously misleading.
What follows are five ‘conventional wisdoms’ and a fresh
perspective that operators should consider:
Myth 1: Convergence is about controlling costs and
driving efficiencies.
This is true but it is by no means the whole story.
Convergence is also about giving subscribers the
personalized services they want. Today’s customers are
more mobile, more demanding and more cost-conscious
than ever. They want instant delivery of services, dynamic
and flexible real-time offers, personalized packages and
control over spending – and they want it now. Converged
billing is the way to give these customers everything
they want, with the freedom to flip between services
and payment options in real time.
Offering this level of convenience and personalization
can provide a distinct competitive advantage. And it
requires a unified customer view that centralizes all
ordering, billing and customer information – eliminating
duplication, synchronization and other data issues
associated with conventional billing systems.
Myth 2: Standalone prepaid only or post-paid
only vendors possess the expertise to achieve full
convergence.
Today’s standalone prepaid and post-paid vendors may
appear to offer the functionality required in a converged
solution but, in reality, they are inherently incapable of
creating this environment on their own. While these
vendors can offer specific point solutions – either prepaid
or post-paid – they may not possess the production
experience to handle all aspects of convergence.
For example, transforming a post-paid system into a
converged system may require the post-paid vendor to
undertake a costly and risky project. They will need to
build prepaid capabilities with complex, real-time, high
availability functionality, that they may not have the
know-how to really understand. Another common stopgap
measure is for prepaid vendors to partner with other
suppliers to provide back-end financial management
for true end-to-end functionality. These multi-vendor
partnerships can result in a patchwork of systems that
creates more problems than they solve.
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Myth 3: Implementing a convergent solution can
mean years of potential disruption to the operator’s
business.
In truth, operators have the freedom to migrate to
convergence as slowly or as quickly as they like with
minimal disruption to existing business. While some
operators are ready to immediately move all of their
existing customers to a converged solution, many prefer
a phased approach. Some choose to phase by customer
segment, others by service type. Still others introduce
new converged capabilities – such as personalized rating
or a common self-service portal across all service types
– without disrupting existing billing processes. A phased
approach is feasible when the operator has chosen a
convergence partner with a modular, pre-integrated
platform and with proven deployment expertise.
Using a modular platform that has robust functionality
already ‘built in’ enables an operator to execute a
transformation in a timeframe appropriate for its
business. This can help distribute capital costs over time,
reduce risks and ensure that the operator’s initial goals
can be validated before moving on to more complex or
comprehensive convergence adoption.
Myth 4: Purchasing complete convergence today
is overbuying. The operator is better off making a
short-term decision today and dealing with longterm
problems later.
One purchase decision can solve both problems. This
strategy of planning for growth requires a modular
product-based environment that can solve business
needs today while offering a growth path to meet
tomorrow’s demands.
With a short-term approach, the operator may
implement tactical solutions using a collection of
suppliers and systems to fill an immediate need. When
it’s time to grow the operator is faced with a painful
reality – its infrastructure is inherently unable to cope
with growth and has, in fact, driven the operator into a
technology dead-end. Short-term gain is overwhelmed
by long-term pain.
Myth 5: Achieving low Total Cost of Ownership
(TCO) must be easy, since everyone says they can
provide it.
In the new world of convergence lowering TCO is about
increasing the operator’s self-sufficiency by reducing its
dependence on suppliers and leveraging the operator’s
own resources. Unless the convergence solution can
support operator self-sufficiency, reducing TCO can be
extremely difficult.
Self-sufficiency is achieved through a productized
software platform that offers a unified view of the
customer supported by a single database containing all
billing, ordering and customer information. The operator
must be able to rapidly configure new services, offers
and promotions without requiring expensive custom
integrations. This approach also gives the operator firm
control over its own future with inherent long-term
application manageability. Being able to leverage a
clear R&D product road map creates affordable upgrade
opportunities for the operator. A low TCO solution must
be driven by a ‘configure, don’t code’ mantra and enables
operators to get new offers into the market in one to two
days, not one to two months.
The bottom line
Convergence requires a new way of deploying and
optimizing the billing and customer care environment,
one that demands proven expertise across service
types and across both the prepaid and post-paid
worlds. Taking convergence a step further - integration
of value-added services with the billing platform offers
additional efficiencies.
While most operators will eventually have to migrate
to convergence to stay competitive, not all billing
suppliers are equally suited to the task of helping an
operator transform. Choosing the right convergence
platform must be a decision rooted in reality, not myth
and it should be about current choices and trade-offs,
risks and rewards.
THE BILLING JOURNAL | 35

Welcome to the LOCAL Billing Association
Doug Zone. Chief Technical Officer, Metratech
There’s more to the telecoms next generation oyster than thinking globally. In
fact, in the future it might just be a surprising lack of globalization that will count.
There is a familiar saying “Think globally, act locally”. And the evidence of its
impact as a guiding principle in the modern commercial world is everywhere.
Close to home, the GBA for example, definitely thinks globally.
We consider how to improve the processes of billing
on a grand scale and from all points of view including
those of the customer, the service provider, the
network operator and the content providers. Which is
all well and good but what about the local community
It counts too - and more and more as it turns out.
There is a lot of discussion right now surrounding
the impact of these ‘local’, online communities;
MySpace, SecondLife, etc. and how they will impact
our lives. These communities are seen as new channels
that offer innovative content and they have given rise
to a number of virtual ‘mom and pop stores’ popping
up across the spectrum. Mirroring the High Street, it
is clear that it will only be a matter of time before the
large retailers set up shop and create their own online
mega-stores. But the really interesting point is that the
business model which both require is up for grabs. We
can be sure of the ‘what’, confident about predicting
the ‘when’, but what about the ‘how’ The million-dollar
questions about the business models are:
• Will it be straight retail based: trolley to till to
credit card
• Three for the price of one offers Offer of the day
Coupon redemption
• Will it be straight subscriber based: CDR to bill to
direct debit/cheque
• Volume discounts Monthly fees
• Will it be real-time billing: CDR to balance from
top-up
• 100 minutes for $10
Or will it be none of these Consider the new Web 2.0
community based services such as virtual worlds and
interactive gaming where on-line stores, auctions and even
rent is ‘billed’ in virtual currencies. Yet the community’s
shop owners and consumers are ultimately real, nonvirtual
wage earners paid in euros. A post-paid billing
model where relationships are ephemeral is inappropriate.
A retail based e-commerce model or a money up front
‘prepaid’ model do not handle long running services like
renting advertising space. Neither of these models is
appropriate where the difference between a customer and
a supplier disappears as everyone becomes both a virtual
shopkeeper and a consumer.
In general all we can confidently predict is that the
commercial models and the issues of how customers pay
and get paid are, for now, entirely up in the air. About the
only thing we can be sure of is that none of the existing,
familiar retail models will be entirely adequate. As we saw
in the online gaming industry, it will take a long time for
standard practices to be defined. The practices imposed
by existing systems pre-defined to support a particular
business model will not suffice. This will be a problem - if
it’s not recognized as such already.
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If we go back to the ‘real’ local world, where communities
are providing telecommunications services like WiMax
as if they were just another universal service like rubbish
collection, policing or street lights then we can see that
‘local’ business models will inevitably become increasingly
important. When you consider that local governments
(with the rise of more and more mega-cities) are becoming
as important (or even more important) than the nation
states themselves (think of New York unilaterally banning
an entire class of unhealthy foods from its citizens) and
how each mayor has a unique vision on how to provide
for his own citizens, then there is no doubt that billing for
local services will be unique from city to city.
The real dilemma is that the existing processes have
become necessarily standardized with the help of the
TM Forum and the GBA which have defined common
business process descriptions, shared information models,
clear functional delineations, key performance indicators,
etc. Can business processes where customer and supplier
interactions are really peer-to-peer and where operators act
more as guarantors and secure ‘souks’, be automated and
yet still enjoy the many man-years of expertise provided
by existing systems and these organizations
The answer is pretty clear once we look ‘globally’ outside
of the world of telecoms and see that SOA is allowing most
industries to ‘Think Globally’ – by putting in a common
architectural methodology and ‘act locally’ – by using
this architecture to create radically new business models.
The fact that so much work by both organizations and
software vendors worldwide is going into helping
any user of a SOA to apply best practices to business
modeling, to define coherent customer interactions and
to achieve KPIs show that the GBA and TM Forum have an
enormous role to play.
The GBA is not only about mandating global business
models – it is about allowing local business models to be
defined – but with operational excellence in mind.
Welcome to the Local Billing Association.
THE BILLING JOURNAL | 37

Published by the GBA. May 2007 ISSN No: 1751-2158
www.globalbilling.org