BANGALORE, INDIA: Even as India's journey towards 3G tag seems to have caught in a jetlag, service providers are leaving no stone unturned to bring in a service differentiator factor into their folds and 3G billing will be one among the crucial factors in 3G's success.

"India continues to be a predominantly prepaid market (90-95 per cent), and in this context, the 'nomenclature of 3G billing' needs to be re-classified as '3G charging'," says Vinay Mehta, senior vice president, Market and Product Strategy, Convergys, in an exclusive interview to CIOL. Excerpts:

CIOL: Being a price-sensitive market, can we expect 3G billing to be different from 2G or 2.5G?

Vinay Mehta: 3G billing is not bound to be any different, if operators continue to offer the same set of services currently offered in 2G/2.5G.

Currently, voice and VAS services continue to be the major revenue categories for the operators while revenues from data services are still hovering in the less than low teens. It is important to be cognizant of the fact that the service adoption and utilization between urban and rural customers will drive different sets of branding and packages and force operators towards micro-segmentation of the market place.

This will drive operators to come up with segment-specific offerings, catering to such segments due to the heterogeneous nature of the Indian market. This becomes an important factor for operators while they strategize their 3G penetration across circles in the country.

Bundling of 3G services for the prepaid subscribers will drive higher usage rates and the adoption of profitable services, albeit in lower volumes initially. This opens up a revenue opportunity for bundling pre/postpaid offerings, thereby increasing 'loyalties' in the prepaid market – which is the current bug bear for most of the prepaid operators globally.

3G charging is not expected to rate voice services any differently, i.e. 300KB of voice usage at a rate of X. If it needs to be different, there is a need to embrace the new "killer applications", such as gaming, e-learning, instant messaging, social networking and mobile broadband, while identifying ways and means of monetizing in ways that are based on the value of content being delivered and not based on bit/byte charges.

CIOL: How important is billing in 3G's success? Do you think higher charges will affect 3G penetration?

VM: 3G success is a very important technological milestone in expanding communications beyond voice and messaging. In the early stages of launching cellular, India traditionally witnessed entry charges to be higher. When competition and adoption picks up, the reverse has been true. However, in the case of 3G services, there is a likelihood that operators might offer "all-you-can-eat" and "flat-rate" plans to begin with as a means of attracting adoption.

The 'addiction' to specific services has been the factor on which operators differentiate post-launch. While keeping the entry charges attractive, the operators can bank on the 'volume' of the market to offset the impact of lower charges. We have seen in other countries that a similar approach has been a successful entry strategy.

CIOL: How will the billing process be differentiated among prepaid and postpaid customers to avoid bill-shock?

VM: Convergys strongly believes that pre/postpaid cannot be service differentiators any longer. The customer experience demands that charges be made available real-time before/after the event for both pre- and postpaid customers. This essentially means that exploiting credit control mechanisms and keeping the customer updated will help manage the customer experience as well as mitigate bill-shocks. This will also help operators decrease their receivables.

We believe that prepaid or postpaid is a state in a customer's lifecycle and that's how it needs to be treated. In other words, a customer could transition from pre- to postpaid or vice-versa in a seamless manner which can be elected by the operator or the customer themselves. The state of the subscriber (pre or post) would be dependent on the type of service that he/she has subscribed to. For example, a subscriber may opt for a postpaid voice service and a prepaid data service.

Similarly, the mechanism of bill delivery to the customer will necessitate changes to ensure real-time updates on the bill charges. With mobile number portability to become a reality by the end of this year, it becomes increasingly important for Indian telecom players to enhance the customer experience. Real-time charging is one way to do this.