Billing: The Missing Link?

By Vikki Lipset

May 21, 2003

Mobile phone carriers are spending big money to spur the adoption of wireless data services, but many are neglecting a key piece of the puzzle: billing.

Mobile phone carriers are spending big money to spur the adoption of wireless data services, but many are neglecting a key piece of the puzzle: billing.

It may not be very glamorous, but industry analysts say that the ability to successfully price and bill for services such as voice, data, subscription-based gaming, streamed audio and video content, and Web-based services will be critical to operators' survival. Telecom research company RHK estimates poor billing practices are costing carriers $30 billion a year in lost revenues.

ORSYP Software, an IT operations management firm that works with several leading European telcos, predicts that the volume of billing data will triple with the introduction of third-generation (3G) wireless services there.

"Accurate and timely billing is crucial for next-generation mobile services, but it will place an enormous data processing strain on operators' IT systems," said Christopher Unrug, UK operations manager for ORSYP. "From our experience in deploying advanced job scheduling solutions for major clients, we believe that the 3G billing data processing problem will increase three-fold as these new services gain market penetration. Operators need to address this problem now or face a torrid time with their billing."

Billing problems are among the issues most likely to prompt customer complaints, according to PlanetFeedback. The Cincinnati-based firm analyzed nearly 18,000 letters to wireless companies since 2000 and discovered that more than half of the complaints involved billing/payment and customer service problems.

The most common billing problems cited included overcharges; fees that are higher than promised at contract signing; problems getting refunds or credits; unexpected roaming fees; and difficulties with contested bills being reported to credit-reporting or collection agencies.

Many carriers are turning to third-party billing specialists, such as Portal Software and Intec Telecom Systems, for help. Portal's customers include 35 of the top 50 wireless carriers, as well as groups such as Connexion by Boeing, who is providing high-speed Internet access to airline passengers.

Last week, Portal announced that it won a contract to provide Wi-Fi billing services to T-Mobile. In addition, the Cupertino, Calif.-based company recently announced an agreement with SAP to jointly develop and sell a billing platform.

The advantage of outsourcing billing is that it allows carriers to start billing for new services immediately, said James Morehead, senior director of solutions marketing at Portal. "Many mobile service providers will invest tons of time and capital building networks, etc., and realize a few months before the launch that they haven't changed billing systems. This results in the infamous free-trial period. What that really means is the billing system isn't ready."

It typically takes eight to nine months to build a custom billing solution, Morehead said, so using a company like Portal helps accelerate the carrier's time to new revenue. He warns that the free trial can be dangerous for carriers: "Once you get users used to [getting a service] for free, it's much harder to transition to paid."

Reprinted from ThinkMobile.



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