Billing in a triple-play world

NEW DELHI, INDIA: One of the hottest topics under debate in telecom these days is the emergence of what have become known as ‘triple’ or ‘quad’ play service providers.

Using a single core network infrastructure and associated OSS/BSS IT systems, service providers who traditionally focused only on one service domain – such as cellular, fixed or cable entertainment – are now moving into adjacent fields on the game board.

What were once fixed boundaries between different technologies and industry sub-sectors are becoming highly permeable and service providers have to move out of their comfort zones to compete in new areas for access to the customers’ pockets and purses.

The late ‘90s may have seen a stirring of some of the technological and commercial forces now being unleashed - such as early versions of VoIP, content services and the emergence of many small service providers - but these largely fizzled out during the financial downtime.

Now, however, these are back with a vengeance, along with some newer and largely unexpected entrants such as community networking services from MySpace, and the tentacle-like reach of web-based entities like Google.

As each service provider gears up for this seismic shift in the telecom terrain, assembling armouries of new technologies, services and partnerships, long term commercial success is only going to come by coordinating an increasingly diverse and complex set of activities and focusing these more directly on the customer.

What has historically been a relatively two-dimensional service world is fast becoming multi-dimensional, challenging traditional business models. The issue now is how to make money through all these new customer delivery channels in a world where revenues from voice calls continue to fall.

Facing competition across multiple dimensions - simultaneously

The forces driving this change are already becoming clear. Wireless communications in both cellular and WiFi/WiMax/WLL incarnations are rapidly becoming ubiquitous in both developed and developing countries with VoIP-based services already starting to challenge and indeed bypass the cellular incumbents.

Location services, long reliant on over-complex technologies and dubious business cases look set to enjoy a resurgence of interest, building on open platforms like GoogleEarth and Web 2.0 concepts. On top of this, the growing confidence in the MVNO model will continue to increase service and application diversity in both the enterprise and personal communications spheres.

In the fixed domain, telecom incumbents, cable operators and start-ups are all looking to bundle IP connectivity with content and entertainment packages, reaching further in many cases into the home or office environments than before. While many regulatory and technical issues remain to be resolved with IPTV and broadband content rights, the continuing falls in voice revenues are forcing operators here to aggressively enter new and previously unexplored domains.

For the business readers of Sun Tzu’s ‘The Art of War’ – a favourite of the airport book shop business section – or any of the other books interlinking military and commercial strategies, history is once again at hand to cast a light on some of these issues.

It’s arguable that what our industry is currently facing is similar to that faced by armies, air forces and navies during the last century when it came to conducting synchronised combined operation.

Just as three very different cultures, technologies and mindsets had to be brought together with a reasonable degree of coordination – which frequently involved the banging together of the large egos amongst the commanders of the different forces – so too must telecommunications companies integrate their operations.

In this context however, the objective is not to bring overwhelming force down on one fixed point on the map, but instead to manage an increasingly long and multi-dimensional logistics and distribution chain, target the customer and, ultimately, extract the maximum profits from them.

The really tricky part involves opening up the customer to get them to pay for all the new services now on offer, making them feel valued – but at the same time protect that relationship from all the new competitive forces out there and still enable them to become part of a revenue-generating community themselves by sharing their content or participating in social networking groups.

While a lot of these new service concepts are essentially still at the beta stage, this doesn’t mean that operators can rest on their laurels. As voice tariffs continue to plummet and basic broadband connectivity over fixed radio or ground links becomes an ever-cheaper commodity, service providers have to find a way of crossing the revenue chasm that’s currently in front of them.

Billing as the key enabler for target acquisition and retention tool

While telecom begins to play out its own version of combined operations across land and the airwaves, there’s one dictum of Sun Tzu’s that remains highly relevant – at least after a tweak or two. While his writings always emphasised the importance of understanding one’s combatant, in our everyday roles it’s our customers that we have to understand.

To be sure the triple and quad-play models are increasing the complexity of the delivery chain from our ends, but from the customer’s perspective they couldn’t for the most part care how services are delivered – they just want them where and when they need them and at the right price. While newer IP-based technologies are cutting capital investment costs for service providers, coexistence with legacy systems is going to be a fact of our industry for some years yet and ‘big bang’ switchovers will be necessarily limited.

In this context, it starts to become obvious that it’s in the customer-facing elements of the infrastructure where the most immediate – and yet strategic – returns can come from. Just as with the combined operations analogy, the technological equivalents of new weapons systems might be continually appearing out of the laboratories and off the production lines, but unless they can be delivered successfully to the most appropriate targets then the supporting innovation will count for little.

There are a number of different facets to consider here when it comes to designing the back office systems needed to manage the incredible complexity that we now face. For a start there are the issues of rating for services and bundles of services.

If customers already complain about the difficulty of understanding the many tariffs on offer from their mobile service providers, how are they going to respond when fixed-mobile, content, entertainment and broadband access offerings get added to the pot? Irrespective of the complexity of the signaling, authorisation and charging functions going on behind the scenes, the customer demands simplicity and transparency across all aspects of the supplier-user relationship.

This rallying cry of simplicity and transparency also applies to the internal operations of a service provider as well as to their relationships with the increasing number of third parties that will be involved in creating services. In some cases these may be TV or radio programmes, in others it will be VNOs set up to specifically target market niches based on ethnicity or special interests. The addition of content and broadcast services also changes the regulatory ground rules that service providers will have to adhere to, both in the areas of financial reporting as well as social responsibility around such issues as advertising, gambling or adult services.

Internally, the unrelenting drive to roll more and more services out to market in shorter and shorter timescales also places increasing pressure on the back office, especially in the field of revenue management and product life cycle management. 

With service and application development moving towards ‘internet time’, where product lifecycles may be measured in weeks or even days – such as around major music, sporting or charity events – service providers will effectively be flying blind unless they have ready access to the relevant data on the success or failure of a particular offering.

If the industry sometimes took a relatively cavalier approach to the problems of fraud and revenue leakage in the past, this laxness cannot continue.   Imagine the state of the world today if armies, air forces and navies could not have worked together to synchronise combined operations during the last century.  As Sun Tzu proposes, military and commercial strategy share a great many of the same principles.

As the industry moves to a truly triple-play world, the strategic enabler for the ‘Combined Operations’ battlefield of the 21st Century will be one that unites different technologies, working practices and mindsets.

As the customer themselves becomes truly mobile – accessing services through a variety of different devices and access technologies – and the value of service and content transactions starts to rise, any vulnerabilities will hit both the bottom line and the confidence levels of customers and business partners.

The author is the vice president, Oracle Communications, Asia Pacific and Japan.