Billing: The Missing Link?

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.