When Stephen Burch, CEO of UK cable operator ntl, recently agreed to appear on a BBC business programme to answer customers' questions, he no doubt anticipated that general questions regarding the quality of customer service provided would be a recurring theme. However, the extent of the 'billing grilling' that proceeded from a number of residential customers who wanted simpler and more understandable bills, rather than promises of enhanced broadband speeds or quadruple-play packages, illustrates a broader issue that faces service providers in the rush to provide multi-play offerings: bill presentment. This issue has often been overlooked by service providers but it is an increasingly important area that may ultimately harm their multi-play delivery ambitions.
Mind the perception gap
The last significant innovations in bill presentment were itemised billing and electronic billing. While service providers have focused their efforts in recent years on improving the technical performance of their networks, bill presentment has tended to remain a back-office process that merely produces a request for payment from postpaid customers for services consumed. Bill presentment has generally been perceived as offering little in the way of competitive differentiation for the service provider.
Operators that view the transition to next-generation services purely as a technology play, and assume that faster networks will be sufficient to satisfy customers, will leave themselves vulnerable to virtual network operators that have entered the telecoms sector from the retail industry.
Increasing competition in many telecoms markets is giving customers more options to change service provider. Billing is often the most frequent and direct form of interaction that a service provider has with a customer and is one of the best ways to cultivate customer loyalty in a competitive market.
To use billing as a means of improving customer retention, service providers must develop presentment strategies that are relevant to customers’ needs and tailored to recent patterns of customer behaviour (for example, by including with bills an offer to trial a new service).
There is no shortage of vendors willing to provide operators with billing solutions (Figure 1 lists the leading vendors by number of system sales for the first half of 2006). Yet, as the telecoms software market consolidates, the number of retail billing system sales announced is declining (see Figure 2), perhaps indicative of service operators’ recent investment priorities (new technologies rather than billing solutions).
| Vendor |
Sales |
| Convergys |
8 |
| Portal Software |
5 |
| CBOSS Corp. |
3 |
| LHS Telekom |
3 |
| Alcatel |
2 |
| Amdocs |
2 |
| Comverse |
2 |
| First Hop |
2 |
| Highdeal |
2 |
| Info Directions |
2 |
| MIND CTI |
2 |
Figure 1: Leading vendors of retail billing and rating systems by number of system sales, January–June 2006 (Source: Analysys Research, 2006)
|
Sales |
| 2003 |
166 |
| 2004 |
152 |
| 2005 |
131 |
| 2006 |
46 |
Figure 2: Total sales of retail billing and rating systems by leading vendors, January 2003–June 2006 (Source: Analysys Research, 2006)
Retailers are poised to exploit their expertise in customer relationship management if telcos do not adequately address bill presentment
Service providers have an opportunity to use bill presentment to stimulate the adoption of next-generation services, including communications and entertainment services delivered over Internet Protocol. However, network operators that view the transition to next-generation services purely as a technology play, and assume that faster networks will be sufficient to satisfy customers, will leave themselves vulnerable to virtual network operators that have entered the telecoms sector from the retail industry in recent years – for whom using billing as a marketing and loyalty-building tool has long been a core competence.
