Indian billing vendors look outside India

A robust, world class billing system forms one of the most critical components of a telecom operator’s infrastructure, as it has a direct impact on the bottom line. Indian vendors however have received a lukewarm response from the domestic market despite the fact that their products are on the shopping list of international telcos. Stanley Glancy reports

It’s a strange situation. Indian software solution providers are acclaimed the world over for delivering high-quality, low-cost solutions. But when it comes to products very few have been able to achieve any significant breakthroughs. Take the case of the telecom billing solutions space. Indian telecom operators have internationally reputed systems in place. But except for one or two exceptions, none of the major telecom service providers in the country have deployed solutions developed by domestic telecom billing solution providers. This despite the fact that most Indian solution vendors boast of quite a few international telecom operators on their client roster. The tide has been changing in the recent past, but it has been an excruciatingly slow turnabout.

The billing system

Billing can be defined as the process of adding up the price of each transaction made in a certain fixed period to determine the final aggregate amount, followed by the generation of a printable image of the bill. Pricing is a key aspect of billing. Records of the transaction are retrieved from the storage system at the end of the fixed period and then processed to generate the final bill. This bill will also include other monthly fees and credits.

Amrita Gangotra says Bharti's billing system has enabled rapid business expansion in terms of roll-out of services across the country, and has helped in providing standard practices uniformly across all customer touch points

Changing technologies, volatile market trends and an equally unstable regulatory environment means that Indian telecom operators are constantly devising new strategies to keep their heads above water. Add to this the flurry of mergers and acquisitions in the recent past and it’s mayhem out there. A robust billing system should be capable of reflecting the change in the aggregate if the price of an individual transaction changes due to these or any other factor. Configuration tools should allow for quick loading of business rules, enabling the operator to rapidly take new products and services to the market for additional revenue streams and cash flows.

Billing includes various components, including rating, discounting, promotions and pricing. Rating is the process of computing a rate for usage of a service-voice or data. Rating means pricing individual calls. Each call is sent to a rating engine and transactions are rated. The billing system takes all these calls and aggregates all other charges to arrive at the final pricing. Pricing is the process of computing a price for a call by doing rating, discounting, and applying promotions—short-term incentives given to customers.

A robust billing system should also provide tools for customising or personalising billing and reporting, fine-tuning of billing cycles and account parameters, creating promotional discounts that are easy to implement, applying invoice corrections immediately, managing accounts receivables and payables, tracking account disputes and providing customer care with Web-based interfaces. Elaborates Amrita Gangotra, VP, IT, Bharti Televentures, “Some of the key functionalities desired in a telecom billing solution include provisioning of service (normal and bulk), rapid and flexible configuration of services/products, express rating and accurate billing, integrated payment and collection, a robust MIS tool and convergent billing solution.”

According to K Nandakumar, president and CEO of Suntec Business Solutions, the billing system should be able to automatically calculate the amount of tax due and interface easily with existing tax management software. It should help reduce costs with comprehensive Web-based interfaces that provides customer care personnel with instant access to customer account information and track account disputes and manage their potential impact on accounts receivables and on collections processing.

Opportunities for Indian players

Just as networks are the backbone of modern communication, the operations support system, including billing and customer care functions, are the backbone of the communication service provider. A billing system along with a customer relationship management (CRM) solution provides telecom operators with a user-friendly interface for creating accounts, services, products and packages. Besides, the account information, product/service details, payment, adjustments, call rating details and invoices are all stored in the billing system, and making it accessible online can provide instant information to customers.

Churn management is another factor that has a huge bearing on an operator’s business. A billing solution is directly linked with overall customer satisfaction. The information captured by the billing system provides statistics on abnormal usage. This information is in turn used by the operator to effectively reduce churn. Says Gangotra, “You need a customer care and billing solution that enables an operator to meet all customer service requirements, and also allows quick roll-out of products and services. The system should also be capable of real-time call rating and billing.”

According to Nandakumar, the Indian telecom billing space could be worth more than $600 million. But for the Indian players in this growing sector the real opportunity lies outside the country.

The telecommunications market outside the United States is estimated to be close to $1.4 trillion, according to the Telecommunications Industry Association (TIA). Buoyed by growth in wireless and support services, the overall telecommunications market internationally is poised for a healthy 10.3 percent compounded average growth rate (CAGR) through 2006. International spending on communications services is expected to reach $788 billion in 2003—a 10.5 percent increase over 2002.

The largest regional market outside North America is Asia-Pacific with total telecommunications revenue expected to reach $421.6 billion in 2003, up from $380 billion in 2002. This market is projected to grow at 9.1 percent through 2006. The Asia-Pacific market is very diverse, with uneven market growth. Of the top markets—Japan continues to exhibit only modest market growth while China and India are growing rapidly. In recent years, growth in the subscriber base for mobile phones in both China and India has exceeded 80 percent CAGR. Considering these factors, a robust, scalable telecom billing system is today an imperative for all operators. Thanks to cutthroat competition telecom billing has today metamorphosed from being a necessary expense into an important strategic tool.

Billing complexities

For most telcos, traditional competitive benchmarks no longer ensure loyalty. Essentially, the best competitive point left is customer care and service, including billing. Says Gangotra, “The billing process encompasses the mission-critical collection and mediation of call detail records through to the issuing of statements and receipt of payments. Beyond that, the bill is the one regular contact a telco has with every customer, and contains a potential wealth of information about each and every account.” Not only must telcos maximise their customer relationships through this consistent point of contact, they must also effectively utilise account information to develop a cohesive portrait of their clients and leverage that portrait into a marketing and churn management tool.

For effective customer service decisions concerning payment defaults shouldn’t be taken on the basis of one particular transaction. Instead it should be based on an aggregate of all the transactions between the operator and the customer over a certain period of time. The billing system should be able to source the required information to provide an overall picture of the customer.

Complexities also creep in when the operator has to offer different pricing to different sets of customers. For instance, members of closed user groups (CUG) have the benefit of lower rates than normal outgoing rates. So the system has to be configured accordingly in order to bill them. The same holds true for customers who have joined under a promotional scheme wherein various concessions and discounts are offered. For example, many operators offer customers something called the ‘Best Value Plan’. Based on information gained from the records of previous transactions the system should be capable of figuring out the best value plan for the customer.

A good billing system should be robust enough to scale to the various demands made by network users and manage the complexity arising thereof, says Ankur Lal

Another pain area for most operators is the sharing of revenue. In the case of content transaction such as tunes, video clips, etc, the service is provided by a third party. The network operator provides this third party with customers and a transport mechanism. This service is soon evolving into a supermarket model where a telecom operator deals with different partners for providing a variety of content—downloads, dating, chatting and m-commerce. The operator has to provide the customer with a single bill but has to settle positions with each content service provider individually. The billing system should enable transparency at both the operator as well as the service providers’ end. In data the final pricing is based after measuring the volume of data, which is generally different for each transaction. Says Ankur Lal, CEO of Infozech Software, “With a plethora of new services being introduced, one key complexity is multi-service mediation, which is to identify and quantify an event as a billable event. In my opinion a good billing system should be robust enough to scale to the various demands made by network users and manage the complexity arising thereof.”

Adds Ritesh Nain, VP—business development and pre-sales, Ascent Telecom, “There is a mismatch between demand and the technology available. Service providers offer new services and features in order to differentiate from their competitors but lack of available technology, at that point of time, makes the task of billing solution vendors more challenging. Apart from this the telecom billing industry is too diversified to have a common standard. Hence the billing vendor has to do provide customised solutions for each individual need.”

The players and their solutions

Though many had entered the fray only a few stalwarts have been left standing. Among them Suntec seems to be the only one that has managed to make its presence felt in the Indian telecom sector. The company, which started off by developing a solution for BSNL, recently managed to deploy its TBMS (telecom billing management systems) at HFCL Infotel, the networking arm of the Himachal Futuristic Communication (HFCL), a leading telecom operator in Punjab. The company has around 240 installations across the country, including a few in Chennai, Bangalore and Maharashtra. The company also boasts of international clients like Batelco (Bahrain Telecommunications Company) and SNT Connect based in The Netherlands, among others.

Suntec has two key products for the telecom sector—TBMS and ARE (advanced rating engine), a rating engine that claims to handle large volumes of transaction data records. TMBS being an open standards-based design enables easy integration into the organisation’s heterogeneous operational support system (OSS) environment. A convergent, rules-based architecture provides the flexibility needed to configure a broad range of complex billing parameters.

Another Indian player, Infozech, provides a comprehensive range of products, including eBill, a customer care and billing product targeted at telecom and next generation service providers. Infozech’s product, ICAS (inter carrier access settlement) facilitates international carriers and service providers to manage their charging, billing and reconciliation needs. Another product from the company’s stable, PMS, is a prepaid management solution that helps providers with PIN management as in PIN generation, distribution, recharge - call charging, activation, deactivation and traffic monitoring. The company boasts of international clients like Embratel Americas, World Link and Globaltel, and is currently working on its first project in India.

Ascent Telecom (AT) provides the Matrix range of solutions, a comprehensive suite of billing and customer care solutions and 24x7 support for prepaid and postpaid telecom service providers. Matrix-VOIP Basic v3.1 billing solution is the prepaid offering by Ascent Telecom. According to Nain, it enables operators to launch prepaid calling card services quickly with a low entry cost.

Challenges

The main challenge Indian telecom billing solution providers face is that of perception. Domestic billing vendors feel that Indian telecom operators are particularly biased when it comes to implementing a solution developed by them. Maybe it has got something to do with the Indian fixation for things foreign. But the common sentiment is that while even a small mistake committed by an Indian vendor is blown out of proportion the operators turn a blind eye to similar mistakes made by a foreign player.

But Gangotra feels this is not true. According to her telecom emancipation is a recent phenomenon in India compared to the rest of the civilised world where telecom services were taken for granted even 20 years back, resulting in the proliferation of telecom solutions outside India. These same products have matured, and today are extremely rich in features. But she feels that while Indian IT professionals are considered to be the best across the world, the same cannot be claimed for Indian products. Adds Gangotra, “Opting for an internationally acclaimed billing solution ensures that along with the product the operator also has to adopt best international practices within the organisation.”

Why some failed

Creating a product is a long drawn process and a risky venture. Many companies that got into the business were not able to sustain themselves mainly due to financial constraints. Most Indian companies also faced the disadvantage of starting from absolute scratch.

Also, international players are generally wary about any new product. Most companies prefer a known brand rather than a new product from a lesser known or unknown player. For them pricing is not the only issue. Most companies have their own internal technical evaluation system, which an Indian player will have to clear before their solution can be accepted. This is one area where many Indian companies have failed to prove themselves.

Formula for success

Value for money is the mantra to success in any industry and the same holds true for the telecom sector. Nandakumar claims that one of the key reasons for Suntec’s success has been its ability to roll out fast—in as low as four months and in some instances within 45-60 days. Suntec provides all functionality out-of-the-box, which enables the firm to implement the solution faster.

All the companies Express Computer spoke to swear by the partner-centric model. Both Nandakumar and Lal feel that this has been one of the key reasons for their success. In most cases the partner is generally an established player with market credibility. These partners not only provide an entry into an otherwise difficult market but also come in handy when it comes to providing after-sales service. Businesses can leverage the systems and specialisation that partners provide and at the same time, focus on their core revenue generating activities. Says Nain, “Partnerships are the key to success. Partners from various industry verticals strengthen our network and the ability to satisfy customer needs.”

According to K Nandakumar billing systems should help reduce costs with comprehensive Web-based interfaces that provide customer care personnel instant access to customer account information and track account disputes

Other factors that are key include the flexibility of the billing solution to accommodate the ever changing demands of the telecom operator. The solution should be rapidly implemented and effectively managed. Ease of use is also paramount. Even the most competent solution may turn out to be useless if it is not easy to use. To be a successful software product company a vendor should also possess an extraordinary understanding of customer need and should ensure performance and reliability for business-critical operations.

Offering a convergent billing system has been another key strategy followed by many players. Focusing on the prepaid segment has become a crucial strategy for most cellular operators. According to industry experts, the prepaid segment is a crucial growth area as they provide up to 55 percent of the operators’ revenue. With advancement in the telecommunications space today in India, and all the dramatic changes which have been happening it can be concluded that billing for converged services, broadband and prepaid would be the focus area in terms of growth for a billing solution provider.

The most challenging part is the vendors’ ability to adapt to ever-changing market requirements. Successful companies have the ability to adapt themselves to new market conditions and understand their customers thoroughly. Says Nain, “Indian companies need to study the concentration of potential customer bases around the world and devise a marketing methodology in order to tap that customer base.”

The way ahead

The gap between Indian software professionals and Indian solutions needs to be bridged by having a proper software development life cycle.

But there is no way an operator can stop billing. It is the core aspect of any telecom provider’s business. Nandakumar feels that most Indian players are now facing billing problems, which might force them to look out for a better solution provider. The question is how long can they continue with the old billing system. This is an opportunity that Indian telecom billing vendors need to tap. The USP that these vendors have to offer is their in-depth knowledge of the Indian environment.

A significant growth in data and application services is expected in the near future. SMS messaging, music downloads and online games are few of the services that can be monetised, given the right billing mechanism. Says Lal, “We are looking at a wider audience whose needs will be varied. To create a satisfied customer base operators would need to provide more interesting services.”

With increasing competition in the mobile wireless service sphere, cellular players will not only have to look at their service offerings to their end-users but also the crucial aspect of billing that will ensure effective control over the all-important thing, revenue.

stanley@expresscomputeronline.com