Prepaid billing was introduced in order to expand the market, e.g., it allowed parents to limit the bills on the phones they gave to their children. The prepaid model was and still is based on lower ARPUs, but it brought in many more subscribers. However, postpaid billing systems were in place so operators had to run separate systems, which was inefficient and costly.

 

The Unified Charging and Billing solution that Nokia Siemens (News - Alert) has announced allows service providers to migrate their existing charging and billing systems. Migration is facilitated by the modular design, which puts the telecommunications specific charging and billing functions into one layer and the enterprise and financial processes into another.

 

The latter provides pre-integrated, converged customer care, financials and reporting functionality. These functions come from Oracle’s customer relationship management (CRM) and enterprise resource planning (ERP) applications that Nokia (News - Alert) Siemens has embedded. The solution is based on a software application architecture (SOA), which allows other CRM and ERP systems to be employed.

 

Employing a single system is obviously more efficient; OPEX (News - Alert) is lower, but the solution also allows operators to market attractive services, which is needed in order to drive up revenues in today’s competitive market place. For example, they can offer service and price plans based on personal preferences. The solution gives customers online access to information about their service usage and costs via an online account view – irrespective of their payment method. Cost transparency is an important feature since it encourages customers to try out new services. In turn it means the operators can identify customers by the services they use as opposed to the way they pay.

 

Targeting Four Main Groups

 

 

 

The unified charging and billing solution targets four main groups. The first is a community; in this case a typical family. A regular pre-paid customer is less profitable for operators and this is reflected in the service offer. However, this changes when the postpaid accounts of the parents are combined with those of the children. Every member can get a personalized service; the children’s accounts can be topped up on line; and they can call their parents when their credit runs out. In this case the postpaid account is used to pay for the call. Parents can also control their calling costs, e.g., the father can see, in real time, what he is paying for international calls when on a business trip.

 

The second group is the typical business user (the suit). Many people have two phones/accounts: one for business and one for personal use. The modular design of the unified billing solution allows one phone to be used for two or more personalized accounts, which can be either post- or prepaid. Rules can be used to select the relevant account, e.g., personal outside office hours; alternatively a dialing prefix can be used.

 

The third group is the consumer (in a yellow top). Many consumers opt for a regular prepaid subscription because they are concerned about cost. They may be using a variety of services and because there is no transparency, funds may run out because they did not know that one of the services, e.g., mobile gaming, was relatively expensive. That is not the case with this unified charging and billing system. Transparency also means that they can go for a postpaid solution without worrying about the bill and in turn that encourages usage of new data services.

 

The last group is the operator and there are numerous benefits, e.g., a prepaid customer can go to the store and transfer to a postpaid service without any hassle. The account will be activated as soon as the ability to pay has been verified. If a postpaid customer does not pay the bills on time, instead of disconnecting them the solution allows the operator to offer a prepaid account and in that way they minimize churn. Somebody who is simply cut off is unlikely to return to the same operator.

 

“This is the next generation of convergent charging and billing. For the first time, the two domains come together as one productized solution that makes the service providers’ processes and daily operations faster, easier to manage and more cost-efficient,” said Juhani Hintikka, Head of Operations and Business Software, Nokia Siemens Networks (News - Alert). “We have calculated together with a customer that a medium size operator in a growth market could grow an additional 4-5 percent annually in EBITDA over a five year period thanks to Unified Charging and Billing alone.”