Present status and prospect of paying utility bill through mobile phone: perspective Bangladesh

Transmittal Letter
2nd May, 2011 Rezwanul Haque Khan Assistant Professor School Of Business United International University Subject: Request to accept the term paper on present status and prospect of paying utility bill through mobile phone: perspective Bangladesh. Dear Sir: Most courteously to affirm that, here six B.B.A students of your section (F), are suggesting their report on Present status and prospect of paying utility bill through mobile phone: perspective Bangladesh. It gives enormous contentment to notify you that this group has accomplished its report under your kind hearted direct care. Now, we have positioned the report before you for your authorization. All members hope that this report will convince you. Sincerely yours, Md. Aminul Islam Soib Mohammad Shuvo A.N.M Rezaul Alam Bhuiyan 111091460 111091357 111091224

ii

Abdullah Al Mohammad Imran Farhin Harun

111073055 111091115

Acknowledgment

This study is the outcome of the term paper writing program commenced by the E-business course trained by Rezwanul Haque Khan, United International University (UIU) for spring11 student to enhancement the understanding and examines knowledge collect from a particular field.

All the members of this group are grateful to them who have honestly and ultimately support them in carrying out the study. Specially, they are gratified to their praiseworthy faculty Rezwanul Haque Khan because of his support gives them the prospect to begin the report punctually.

We are thankful to the websites that indirectly helped us in finishing the term paper specially accumulating information. To conclude, we are obliged a thoughtful logical debt to the elder for part time help, support and priceless suggestion in thoughts and mounting of this report.

iii

Declaration
This is to notify that the period on present status and prospect of paying utility bill through mobile phone: perspective Bangladesh. has been equipped in the accomplishment of the necessity of the course E-Business. It has been arranged for academic base only and the statement is completely prepared by us and it didnt duplicate from any one. This creative work is offered to United International University and any part of the report has been proposed for any other use and the work has not been available in any academic journal or periodical.

Md. Aminul Islam (111091460) . Abdullah Al Mohammad Imran (111073055) ... Farhin Harun (111091115) Soib Mohammad Shuvo (111091357) .

iv

A.N.M. Rezaul Alam Bhuiyan (111091224)

Objectives

To know about mobile bill payment services and where about in Bangladesh.

Detecting the participants in mobile utility billing process Role of these participants Security measure issues regarding mobile bill payment. Challenges in this sector. Future scopes in this sector.

Table of Content
Contents
Preface Major participants in mobile DESCO bill payment External bill payment procedure of GP External bill payment procedure of Banglalink External bill payment procedure of Citycell Internal Process for Paying Utility bill of GP Advancement brought by Grameen phone in this Sector: Security measures of Grameen Phone Billpay Service: Limitations of Utility Bill Payment Service through mobile in BD Future scopes Recommendations Conclusion

Page no.

vi

Preface

Mobile Commerce is taking a huge glide here in Bangladesh in a very robust way and by 2011 Bangladesh will be one of the major countries where M-Commerce will be much more flourished. Banks and Telecoms are the main initiators and their initiatives are influenced by the Digital Bangladesh Vision 2020 of the current political Government. Initially Mobile commerce has been rise through the Mobile bill payment and then its footprint has been extended to the utility Bill Payments and now coming with international remittance and eyeing to shopping/ticketing payments. Bill Pay is a unique concept that enables customers to pay bills through mobile phone shops or directly from their mobile phones. Three of the Telecoms already launched utility Bill Payment services fully and much more initiatives are coming on.

vii

Major participants in mobile DESCO bill payment:

In Bangladesh utility bills are paid through mobile which are electricity bills, water bills and gas bills. Electricity bills are received by DESCO (Dhaka Electricity Supply Company) , the water bills are received by WASA (Water Supply & Sewerage Authority) and gas bills are received by TITAS.

Three telecom companies:

Grameen Phone, Banglalink and Citycell have launched the service of paying bill of DESCO and one company named Robi has opened the service of paying the bill of WASA. Grameenphone also have the service of paying Titas gas bills. In this report we are specially asked to detect the bill payment service of DESCO. From this perspective there are 4 participants according to our requirement.

DESCO:
DESCO's service boundaries are "Greater Dhaka Area" which means all the municipal areas and industrial areas and any adjacent areas declared by the

viii

Government through gazette notification of the districts of Dhaka, Narayanganj, Munshiganj, Manikgonj, Gazipur and Narshingdi. Thus DESCO areas also include the rural areas of Greater Dhaka Districts and the pockets within the distribution areas of the PBSs such as Savar, Narsingdi, Manikgonj, Gazipur, and Kaliganj etc. The servicing of the rural areas and isolated urban pockets is considerably affecting the performance of DESCO both from a system loss point of view and from the view of operational expenses and service quality. Servicing areas which are separated from the city by natural barriers such as the Burigonga, Turag, Balu, Sitalakhya and Dhaleshawari river also increases the Apart from affecting the performance of DESCO.

Grameenphone

Grameenphone widely known as GP is the leading telecommunications service provider in Bangladesh. With more than 27 million subscribers (as of October 2010) Grameenphone is the largest cellular operator in the country. It is a joint venture enterprise between Telenor and Grameen Telecom Corporation, a nonprofit sister concern of the internationally acclaimed microfinance organization and community development bank Grameen Bank. Telenor, the largest telecommunications company in Norway, owns 55.8% shares of Grameenphone; Grameen Telecom owns 34.2% and the remaining 10% is publicly held Grameenphone was the first company to introduce GSM technology in Bangladesh. It also established the first 24-hour Call Center to support its subscribers. With the slogan Stay Close, stated goal of Grameenphone is to provide affordable telephony to the entire population of Bangladesh. The BillPay solution derives from the Seed 2004 idea "Mobile Money Management" developed by Monowaruz Zaman of Grameenphone. The basic idea was to introduce mobile-based financial services in countries lacking banking infrastructure and with low penetration levels. In Bangladesh, less than

ix

5-10 per cent of the population has access to conventional banking services in this cash economy. In 2009, BillPay set many milestones. BillPay was expanded to all corners of the country to enable the people of Bangladesh to enjoy the service. BillPay was also surpassing more than two million error free bill payments - a milestone achievement for such a new and innovative service. Among these two million bills paid through BillPay, 1.65 millions were paid in 2009 alone.

Citycell
Citycell (Pacific Bangladesh Telecom Limited) is the first mobile communications company of Bangladesh. It is the only CDMA network operator in the country. As of 1 March 2008, Citycell's total mobile subscriber base is 1.56 million, up 137 per cent or 680,000 from two years ago, giving it the best growth rate of the company till date. Citycell is currently owned by Singtel with 45% stake and the rest 55% owned by Pacific Group and Far East Telecom. By the end of 2007 Citycell had refurbished its old brand identity and introduced a new logo and corporate identity; the new logo is very reminiscent of the old logo. However the slogan has remained unchanged "because we care" As of July, 2008 Citycell has 1.67 million subscribers. It started its bill payment service through mobile by the end of 2010. The agreement signing ceremony was held at DESCO Head Office, Banani on October 4, 2010. Mr. David Lee, Chief Operating Officer of Citycell and Mr. Engineer Mohammad Kamruzzaman, Manager, Procurement and Contract Management of DESCO signed the agreement on behalf of their respective organization.

This unique service can be availed in two ways. Citycell customers will be able to pay their DESCO bill through his/her own Citycell mobile connection. In addition, any DESCO subscriber will be able to pay his/her electricity bill at any Citycell designated Point of Sales. This service will enable a hassle free, convenient and quick way to pay the electricity bills.

Banglalink
Banglalink is the second largest cellular service provider in Bangladesh after Grameenphone. As of November, 2009, Banglalink has a subscriber base of 12.99 million. It is a wholly owned subsidiary of Orascom Telecom. Banglalink had 1.03 million connections until December, 2005. The number of Banglalink users increased by 257 per cent and stood at 3.64 million at the end of 2006, making it the fastest growing operator in the world of that year. In August, 2006, Banglalink became the first company to provide free incoming calls from BTTB for both postpaid and prepaid connections. On August 20, 2008, Banglalink got past the landmark of 10 million subscriber base. Banglalink and Dhaka Electric Supply Co. Ltd. (DESCO) have signed an agreement to enable Mobile Based electricity bill payment service in DESCO operations area in Dhaka in the middle phase of 2010.

xi

External bill payment procedure of GP

Mobile bill-pay with DESCO

To avail this service, we need to register through SMS by typing Reg followed by a space and then typing company code followed by another space and then typing the bill account number. Send this message to 1200. For example:

Company Name

What to type in SMS

Note Here 12345678 account number is a sample

DESCO

Reg DSCO 12345678

As soon as registration is complete, change the PIN number sent from the System. We can then start paying your utility bills from any Grameen phone authorized Bill-Pay shop.

xii

External bill payment procedure of Banglalink

Mobile bill-pay with Desco
Banglalink subscribers can pay their electricity bill of all desco zones directly from their mobile phone. Non-banglalink subscribers and non-mobile users can also pay their desco bill from "mobile cash point" marked outlets. ussd technology is used for this service which is more cost and time efficient and highly secured. Side by side customers can also pay bill just by typing a simple sms

Area covered banglalink will be collecting bills from all the 9 s&d of desco. Mobile cash points Around 5000 mobile cash points are spread all over to the designated desco areas. This number will be gradually increased with time. To know the nearest "mobile cash point" for bill pay please call our helpline at 1200 (banglalink numb:er) or 01911304120 (from any operator number)

Desco Bill Details:

xiii

Desco bill details is described below with a chart:-

xiv

xv

Important information on bill payment

utility company id customer id bill number amount of bill Desco location mentioned on the top left corner of the bill copy bill no. mentioned on the top left corner of the bill copy total amount mentioned on the bill copy (amount to be paid)

Brief procedure
Procedure I: bill payment from subscribers own banglalink connection: Step 1: registration Non registered banglalink consumers having valid desco account can register with the following:

dial *777# and provide the following: biller id (e.g. desco) - selection from menu customer id - input by customer

After the registration the subscriber will get a four digit pin within 24 hours. This pin will be used in all future transaction. Subscribers are advised to change the pin immediately. To change the pin customer has to perform the following simple operation: chg write message go to message option 1234 7777 type chg old pin new pin 480 send to 480

Example of the reply sms you will receive

xvi

you have successfully changed your banglalink pin on 04/19/09 06:26 pm. Step 2: refill subscribers bill pay account balance from nearby "mobile cash point" Balance refill: Step i: the customer goes to mobile cash point and requests the retailer with his/her mobile number amount to be refilled. the retailer initiates the transaction. Step ii: after receiving the following sms, subscribers confirm the transaction from their mobile after receiving the following sms: "Retailer wants to transfer taka xxxx.xx in your money wallet. To confirm please type yes <pin> and send to 480" the customer will perform the following operation and his account will be refilled:

write message

yes 1234

480

go to message option Customer association:

type yes customer pin

send to 480

A customer needs to associate his/her customer id with the billpay service. Customers can do this by the following way:

Dial *777# and provide the following:

xvii

select service (e.g. billpay) - from menu select category (e.g. electricity) - from menu select biller company (e.g desco) - from menu enter the customer id that needs to be associated enter pin to confirm

A DESCO customer can associate multiple numbers to pay bill for those customer ids. Step 3: pay DESCO bill by simply dialing *777# from your banglalink mobile and provide the following information:

customer pin - input by customer select service name (e.g. billpay) from menu select biller category (e.g electricity) from menu select biller id (e.g desco) from menu input the DESCO customer id select bill number against the customer id from menu confirm transaction with pin

When the process is completed the customer will receive a confirmation sms in his mobile with unique transaction id. The customer is advised to preserve the sms for future reference. Procedure ii: bill payment at "mobile cash point":

DESCO consumers simply go to the nearby "mobile cash point" marked outlet with printed bill copy and cash. Billpay point agent will pay the bill on DESCO consumers behalf and provide money receipt with paid seal and unique transaction id. Customers may give their any operator mobile number to get confirmation sms after successful DESCO bill payment.

xviii

External bill payment procedure of Citycell

Mobile bill-pay with DESCO

Citycell moneybag service is a sophisticated, hassle free and secured mobile financial service through which you will be able to pay your DESCO bill from your Citycell mobile phone or nearest Citycell moneybag marked outlets. To pay bill through moneybag marked outlets you do not need to be a Citycell user. Key benefits of Citycell moneybag service

Now you do not have to run around to different places or standing in a long queue for paying your bills. Just go to the nearest Citycell moneybag marked outlets with the bill copy provided by DESCO or pay directly form your Citycell mobile phone.

It is secured enough because; at first you have to register in the system. After successful registration you will get a PIN which will be required to conduct further transactions. However, you can change your PIN any time you want by following the PIN change procedure.

You will also get a Transaction ID (TID) in each transaction through which it is possible to trace any transaction.

xix

Mode of Service: Moneybag service is available both in SMS and IVR and no charge is applicable for SMS and IVR. You can pay your bills either form moneybag marked outlets or directly from your Citycell mobile phone. DESCO bill payment from moneybag marked outlets You have to go to the moneybag marked outlets with the monthly bill copy provided by DESCO and ask retailer to pay your bill. After making the payment retailer will provide you a money receipt and mark a seal in your bill copy. Keep the money receipt and bill copy for your future reference. For the bill payment through moneybag marked outlets you do not need to be a Citycell mobile phone user.

DESCO bill payment from Citycell mobile You can also pay your DESCO bills directly from your Citycell mobile phone. First you have to be registered with moneybag service. After registration you will receive a PIN which will be required for further transactions. Once you get registered with moneybag service, you need to Cash-in your moneybag account from nearest moneybag marked outlets. After cash-in you can use your moneybag balance to pay your DESCO bill. Please note that, your moneybag balance shall only be used for moneybag services.

xx

Service charge The charges are as followsBill Amount Tk. 400 or less Tk. 401 to Tk. 1500 Tk. 1501 to Tk. 5000 More than Tk. 5000 *Including VAT DESCO registration process You can register with DESCO bill payment service either by sending a SMS or dialing to 6666. For registration through SMS please see the below instructions TypeREG <space> DESCO <space> ACCOUNT NO and send to 6666. Where, REG is the keyword for registration DESCO is the keyword for DESCO ACCOUNT NO is the unique number provided by DESCO for their customer Service Charge* Tk. 5 Tk. 10 Tk. 15 Tk. 25

xxi

Example

PIN change procedure You can change your PIN by sending a simple SMS or dialing to 6666. For SMS please typePIN <space> old PIN <space> new PIN and send to 6666. Where, PIN is the keyword for changing PIN Old PIN is the existing PIN New PIN is the customer preferred PIN

xxii

Example

DESCO bill payment procedure You can pay your DESCO bill either by sending SMS or calling to 6666. For SMS you need to follow the below instructionsPay <space>DESCO<space> ACCOUNT NO<space>Bill NO<space> Amount<space>PIN and send to 6666. Where, Pay is the keyword for bill payment DESCO is the keyword for DESCO service ACCOUNT NO is the unique number provided by DESCO for their customer Bill NO is the ID which written in the customers each month bill Amount is the full figure mentioned in the bill copy PIN is the Subscriber Personal Identification Number

xxiii

Example

DESCO bill status check Yes you can see your bill status whether it paid or unpaid by sending SMS or calling to 6666. For SMS please typeBST<space>DESCO<space> Account No<space>Bill No<space> PIN and send to 6666. Where, BST is the keyword for bill status query DESCO is the keyword for DESCO service ACCOUNT NO is the unique number provided by DESCO for their customer Bill NO is the ID which written in the customers each month bill PIN is the Subscriber Personal Identification Number chosen

xxiv

Example

Citycell moneybag account balance check You can check your Citycell moneybag balance through sending SMS or dialing to 6666. For SMS please typeBAL<space>PIN and send to 6666. Where, BAL is the keyword for checking Citycell moneybag balance PIN is the Subscriber Personal Identification Number

xxv

Example

Citycell moneybag mini statement You can get your Citycell moneybag mini statement through sending SMS or dialing to 6666. For SMS please typeSTM<space>PIN and send to 6666. Where, STM is the keyword for mini statement PIN is the Subscriber Personal Identification Number

xxvi

Example

DESCO de-registration process You can deregister from DESCO service by sending SMS or dialing to 6666. For SMS please typeDEREG<space>DESCO<space>ACCOUNT NO<space>PIN and send to 6666. Where, DEREG is the keyword for de-registration DESCO is the keyword for DESCO ACCOUNT NO is the unique number provided by Dhaka WASA for their customer PIN is the Subscriber Personal Identification Number

xxvii

Example

Internal Process for Paying Utility bill of GP :

There are some parties associated with the internal process of Grameen phone. They are described below: First, the bill payer receives the bill. Then he goes to any approved dealer of Grameen Phone who takes the bill on behalf of grameen phone. He receives the money and sends the money through mobile using a code to the head office of Grameen phone which is situated in Baridhara Bashandhara. A person who works for DESCO is always there in the Grameen phone head office he receives the bill through the code and sends the bill to DESCO. DESCO receives the money using the code. Here it the parties who are involved in this process are described below through a chart:

xxviii

Bill payer

Grameen Phone Deale r

Head office of GP

Person appointed

by

DESCO

DESCO
Advancement brought by Grameen phone in this Sector:

Telenor Group mobile operator Grameenphone and the Bangladesh Power and Development Board (PDB) launched the service jointly in 2006, to make bill payment a hassle-free task for the people of Bangladesh. BillPay allows people to pay their electricity bills either from their Grameenphone mobile or at any authorized BillPay centre. Innovative electronic bill payment service Bill Pay is an innovative, first of its kind service in Bangladesh, which provides electronic bill payment service for utilities services and for other companies. A customer, regardless of owning a mobile connection or not, can pay his or her utility bills and other bills through this service. xxix

Simplifying the bill payment process The solution is driven by the motivation of Grameenphone and PDB to simplify the bill payment process and thus do away with the problems associated with paying bills: standing in long queues, travelling, limited payment hours and various post-payment hassles. This has made my life so much easier. Earlier I had to stand in a long queue for hours to pay the bills. Now I dont need to do that. I can pay my bills any time of the day and anywhere in the country with my mobile phone. Im very pleased with this service, says Faiyead Ahmedul Hye, a busy Business Executive in Dhaka.

Mobile Money Management The BillPay solution derives from the Seed 2004 idea "Mobile Money Management". The basic idea was to introduce mobile-based financial services in countries lacking banking infrastructure and with low penetration levels. In Bangladesh, less than 5-10 per cent of the population has access to conventional banking services in this cash economy. Ensuring transparency Grameenphone is using its extensive distribution network and proven technology to help automate PDB bill collection infrastructure in Bangladesh. Grameenphone feels that this not only helps to make bill paying easier, it is also a convenience that it can make a big impact on and potentially change the lives of a large part of the population. Today's billing systems are manual, increasing the risk of human error, and subscribers often have to take the bill receipt to the respective authorities to correct or expedite the transaction.

xxx

Expanded to all of Bangladesh In 2009, BillPay set many milestones. BillPay was expanded to all corners of the country to enable the people of Bangladesh to enjoy the service. BillPay was also surpassing more than two million error free bill payments - a milestone achievement for such a new and innovative service. Among these two million bills paid through BillPay, 1.65 millions were paid in 2009 alone. These transactions have saved valuable productive time and energy for consumers and thus contributed in the national development. Soon be introduced in other areas of Bangladesh BillPay has already earned much attention from the other utility companies and the service will soon be introduced in other areas of Bangladesh with other companies. Not only utility companies, but other private-sector organizations have also shown a strong interest in this new bill payment system.

Security measures of Grameen Phone Billpay Service:

BillPay is a secure and convenient electronic bill payment service. The service ensures end-to-end transparency and automatic bill payment data posting at the utility company end. The traditional billing systems are manual, increasing the risk of human error, and subscribers often have to take the bill receipt to the respective authorities to correct or expedite the transaction. The BillPay transaction is thereby more transparent than traditional ways of paying bills. The security measures taken by GP is like that Security Management: Ensures the end-to-end safety of the mobile and the technology chain. Robust security mechanisms built into the system include:

xxxi

 Transaction Security: Secures transactions via a unique PIN assigned to the customers Transport Security: Provides end-to-end transport security through all technical links in the value chain from the mobile device through the payment processing infrastructure to the core biller system. Data Security: Stores critical, sensitive information in the 3DESencrypted format Passwords and PIN codes are represented as hash values and stored using the MD-5 algorithms. System Security: Provides tools and capabilities to protect from risks, such as staff/insider fraud and vast peak volumes.

Limitations of Utility Bill Payment Service through mobile in Bangladesh

i. Almost all public utility service providing organizations have no specialized Customer care and Marketing sections. These sections are normally handle customer problems and circulate different service features to the customers. Top management can get relevant feedbacks of the field level problems through these sections.

ii. One of the biggest technical problems is the absence of a standard database management of the utility service providers. As most of the utility service providers require that the amount paid is exactly as the amount mentioned in the xxxii

bill (which might be Tk. X/- and Y paisa), the service provider for not having a standard database cannot maintain a debit/credit ledger; for which the customer gets in the trouble of paying the exact amount and not more as advance.

iii. Data collection was another problem that was observed. In case of DESA, WASA and PDB in particular this problem exists. As the meters readings are not at their own premises but at the customers place, it takes longer time for the whole billing procedure. Service providers like telephone operators do not have this problem as the billing is done at their own premises.

iv. There was an observation made regarding Ready Cash card payment. Even though Ready Cash card is one of the most favored ways it is still not successful. Many people still doesnt know what Ready Cash card is or how to use it. The reason for it to be observed was lack of publicity. v. It was also observed that there are approximately only thousand billpay branches throughout the country and there is almost the whole country needing to pay for the utility services. So, it is very important that channels of bill pay transaction should be increased.

vi. Regarding the above mentioned observation it was then noticed that the POS system of mobile operators does not require any bank involvement from the customers part and it didnt have any time constraint for payment. If the other utility service providers could use a similar method then it would definitely ease the payment hassle for the customers.

xxxiii

vii. Information regarding billing is not easily available from many of the service providers. So if the client was able to see the billing status on the internet and then after paying could be notified immediately then the client would know exactly what his billing status is. viii. The customer who wants to pay the bill of previous month cant do so with the existing mobile utility bill payment process. So, there should be standard procedure for paying in case of all transaction circumstances.

Future scopes:

xxxiv

Recommendations:

xxxv

Conclusion:

xxxvi

References:

xxxvii