The centrality of billing to success in 4G

Up your game, not just your network

Convergys Perspective Paper
The potential of 4G
Communication service providers (CSPs) around
the world are gearing up for 4G and customers are
anticipating much higher reliability and speed on
their mobile devices. While network upgrades are
underway, CSPs need to assess the readiness of their
infrastructure for 4G, not least revenue management
systems, which are a key driver of success.
CSPs will be keen to learn from their experience of the
introduction of GPRS and 3G services and ensure that
they optimize 4G rollout with convergent, integrated
revenue management solutions.
4G represents a signifcant challenge and opportunity for
CSPs. The opportunity to drive revenues by enriching
the customer experience can only be realized by
meeting the challenges that 4G poses head on. And
these challenges are numerous, spanning technology,
fnances and user experience as CSPs strive to meet
the ITU-set timescale of 2012-15 for global commercial
rollout.
At the time of writing, 156 CSPs in 64 countries had
announced they were investing in LTE and 113 of these
had made commercial commitments, according to the
Global Mobile Suppliers Association (GSA). 4G-badged
services are currently operational in several countries
including Sweden, Norway, Germany, Uzbekistan, Hong
Kong, USA, Poland, Austria, and the list is continuously
increasing.
These commercial commitments are multi-billion
dollar investments coming at a time when many have
yet to reach proftability on their 3G investments. An
assessment of CSPs return on capital investment, when
compared to cost of capital, reveals several of them are
eroding capital value. And now they will be investing
considerable sums deploying new packet switched
transmission networks and launching 4G devices,
innovative services and content made possible by 4Gs
high speed data.
Unsurprisingly, excitement among users is palpable,
because 4G promises the delivery of high defnition
movies and videos, 3D experience, graphic intensive
games and a host of other such services on their mobile
devices.
Meeting customers service
expectations and reducing time to
market
Compared to its predecessors, 4G delivers much higher
levels of data speed and reliability. On 3G, consumers
trying to access bandwidth hungry content such as
movies and games while on a train or at the beach,
continue to struggle with download speeds. Experiences
like these constrained the average revenue per user
(ARPU) CSPs could generate. 4G is set to overcome
such hurdles by maximizing revenue by providing a truly
reliable service.
To leverage such network enhancements, CSPs will
need to be quick in:
1. Launching a host of 4G compatible mobile devices
(smart phones, tablets, etc)
2. Bringing innovative services and attractive bundles to
customers
3. Incentivizing purchasing through customer and time
relevant promotions.
CSPs with smart billing infrastructures that support rapid
introduction of new devices, services and promotions
will gain clear competitive advantage in a 4G world.
Theyll be able to respond to customer demand and
technology innovations with new products and services
within hours or days, rather than months (some CSPs
take as long as 13 months to launch a new service on a
host of legacy systems).
Key areas 4G impacts on a CSPs business
Speed to market 1.
Scalability 2.
Costs 3.
Customer experience 4.
Scalability to meet a higher number
of 4G transactions
Infonetics has forecast 165 million LTE subscribers by
2014, and Informa research suggests smartphones
account for almost 65 percent of mobile traffc (average
traffc per smartphone user will increase 8-fold by 2015).
These statistics are clear indications of the potential
increase in scale of operations contributed by 4G. In a
world where all-you-can-eat is on the decline, and pay-
per-use type of business models on the rise, CSPs with
legacy revenue management systems have a cause for
concern. Such systems are not designed to handle fast
scaling up of operations and will be unable to handle
the pace of incremental change in transaction volumes
or handle mechanisms to alleviate these transaction
volumes such as smart aggregation.
Better cost control and lowering
operational billing costs
Executive boards, along with their shareholders, are
wondering if they will see a return on 4G investments
and hoping it will be sooner than 3G. To avoid the 3G
episode of struggling to hit proftability, CSPs will have
to get a tighter grip on costs in all business areas,
including revenue management. Billing systems with low
operational costs are key in controlling 4G spends. Such
systems offer a high degree of automation alongside
minimal manual intervention, as well as speeding
up processes that would otherwise consume major
resources within billing departments.
Billing teams are able to focus on ensuring their systems
support newly emergent personalized and self-managed
services, rather than micro-managing the bad debts that
result from the input errors, over and under charging,
and bill disputes inherent in systems with a lesser
degree of automation.
In a survey of CSP marketing and technology executives
earlier in the year, Yankee Group identifed expense
reduction as the top priority for 2010 and among the
top two priorities by 2014. The survey report said,
The drive to reduce opex sits above all other sources
of investment motivation, so much so that it crosses
all boundaries of CSP type, wireless generation, or
geographic region.
Delivering a superior customer
experience
4G markets are already showing intense competition.
Already three CSPs in Sweden have commercially
launched 4G services, and this is just an indication of
the competitive road ahead. Ensuring customers have
a good service experience is critical to justifying large
scale network upgrade investments.
Revenue management or billing systems can help CSPs
deliver a superior customer experience. Accurate billing
delivered by smart systems is one way; another is by
giving customers the control of their subscriptions. In
a 4G world, where networks support the delivery of a
wider variety of services and content in the hands of
customers, parents and employers will want to control
what their children or employees have access to and
when. Hence making PCRF (Policy Charging and Rules
Function) a critical component in the 4G delivery engine.
PCRF with its bandwidth tracking and throttling
capabilities, not only provides operators the opportunity
to offer and monetize tiered internet access, but also
ensures high ARPU customers receive the quality of
service they are promised. All this is extremely critical in
a 4G context where capacity issues can quickly run the
risk of slowing data access or even terminating voice
coverage to subscribers.
The Smart way to optimize
revenue management
All these revenue-generating options are feasible
alongside tight cost control. CTOs and CIOs are
already fne tuning their business models with smarter
billing systems that:
Are technology agnostic and scalable
Have low ongoing operating costs
Offer agility, fexibility and real-time intelligence
Support service customization and self-management
Support any combination of bundles and tariffs
Allow sophisticated retailing and branding experiences
Enable new launches in hours and days, not months.
Convergys has a track-record of delivering Smart
Revenue Solutions for CSPs around the world
in retail, wholesale and enterprise environments,
surpassing agreed service levels and developing
strong ongoing relationships with providers.
Convergys Smart Revenue Solutions
Convergys has 25 years experience providing Smart Revenue
Solutions to the telecoms, cable, satellite, broadband, and utilities
markets. With its convergent billing and customer care solutions,
Convergys helps organizations better understand, sell to, and
serve their customers to build stronger relationships and turn
transactions into proft. Convergys' future-proof solutions enable
clients to offer personalized, innovative services and delivery,
build customer loyalty, lower costs, and grow revenues.
Convergys is a global leader in relationship management enabling
leading companies in over 70 countries to deliver exceptional
customer experience. Convergys employs nearly 70,000
employees, speaking more than 35 languages, in 70 facilities
across the globe, and routinely handles over two billion customer
interactions every year. Convergys is globally trusted and proven
in the market, refected by the fact that its top 40 telecoms clients
have been with Convergys for more than 25 years.
For more information visit www.convergys.com/smart revenue,
or call:
United Kingdom: +44 (0)1223 705000
United States: +1 800 344 3000
Singapore: +65 6557 2277
Brazil: +55 11 5504 6800
2011 Convergys Corporation. All rights reserved. Convergys and the Convergys logo are registered
trademarks of Convergys. Convergys refers to Convergys Corporation and its wholly owned subsidiaries.
4G Perspective Paper 2011