Cellular phone ringtone to download

Call it the paradox of progress: the more networks, increase in speed and capacity, the more important back office systems have become to carriers.

Right now the focus for carriers is on billing, operational support and care systems that look after customers. Sure, telco executives have been talking "customer focus" for years, but with competition intensifying it is now a matter of survival.

That's because a large base of customers, willing to spend money on information and communication services, is the unique competitive strength mobile and fixed carriers have. Better still, carriers have a good idea of just what customers like to spend their money on and, thanks to new customer management tools, they are aiming to get to know that even better.

By smartly leveraging customers, telcos are getting into the business of being service delivery channels. And they are not just competing against each other for end-users. As 3G mobile and broadband IP systems roll out, they are battling to be the network platform of choice for ASPs, video streaming, news, transactions and a host of other services for content providers.

Said Agnes Nardi, managing director of Hutchison Telecom in Hong Kong: "Looking after the customer is what it is all about."

Neil Montefiore, CEO of Singapore mobile operator M1, says the opportunity for mobile operators is to aggregate services. "It's becoming very important for all major operators. The type of services we sell to our customers is changing," he says.

John Rocca, Asia-Pacific director for mediation provider Intec Telecom, puts it thus: "Telecom operators are becoming suppliers of information in whatever form -- not just calls and data, but they will be carrying products too. They will become the delivery arm for various types of businesses."

At the heart of this is one of the very basic rules of marketing: that it is vastly easier and cheaper -- by sixfold, according to some experts -- to sell to an existing customer than it is to acquire a new one.

The emergence of customer leveraging and management as a competitive tool has led to the rise in importance in the billing and customer relationship management (CRM) sectors in recent years. Not just in telecommunications, but in any industry with a large customer base, such as banks, airlines and the leisure sector.

In telecoms, billing historically was performed to retrieve the cost of carriers' infrastructure investment, using a rating system that worked either by time or by distance, or both.

That has already changed a good deal. Carrier executives now commonly see billing and OSS as strategic weapons, rather than cost centers.

But in the coming era of multi-service networks these platforms will become the critical area of differentiation. The opportunity is about being able to target a customer segment with a tailored package, measure customers' use of the package, collect and sift that information, send it to the billing system and then analyse the usage patterns in preparation for the next campaign.

Billions of events

A good indicator of the industry direction is seen in Hutchison 3G UK, the leading vehicle for Hutchison-Whampoa's global 3G projects. H3G is a new operator, obviously with no legacy systems, and in the space of three months in 2001 signed no less than four billing and customer care contracts: with ADC for a billing system, with Intec Telecom for a mediation platform, and with Chordiant and E.piphany for two CRM systems.

How are these supposed to fit together? The ADC billing platform itself generates bills for customers' usage of network services and prepares an account for payment. It also provides a "single view" of the customer.

But the billing platform needs records of actual usage, and this is the role of mediation. A good mediation system today can process billions of "events" in a day, reject the 99% that are irrelevant and deliver the balance to the billing system.

The "unified CRM" system from California-based Chordiant is intended to manage daily customer interactions. That's described by one Hutchison exec as the "muscle", while E.piphany's "analytic CRM", which uses data mining technology to generate customer profiles, is "the brains".

Officially, at least, Hutchison will deploy these platforms within its seven 3G licensees in Asia, Australasia and Europe. Whether that actually happens will doubtless depend on how well they come together.

But the adoption at this early stage of Hutchison's business cycle of the four systems underlines the importance of billing and customer management processes for next generation cellular.

It's not just a mobile phenomenon. It's just as true in wireline networks, where the driver is IP.

Australia's Macquarie Corporate Telecommunications, which targets the business and government sector, found that after setting up co-location centers and with the ever-increasing use of IP, its billing system couldn't cope.

"When you get into the IP space it gets very complex, so we made the decision to go out and purchase a mediation system," said Glen Noble, Macquarie's general manager for next generation integrated carrier services.

"For voice, enterprises can buy tools that track in detail the use of voice services. But with IP you have no idea what you're paying. If you are trying to vary IP with hosting and co-location, the complexity goes up significantly."

He noted that most of the mediation offerings available are focused on the ISP market, tuned primarily to track downloads, or they are for voice, modified to handle data.

Corporates have broader requirements and are becoming increasingly demanding, Noble observes.

One Macquarie customer received 300 telecom bills for its Australia-wide offices. Given that each monthly bill cost A$30-$50 to process, involving four or five steps, the company saved a massive amount of administration cost by consolidating into a single bill.

"If you are trying to be flexible in your service delivery, the billing platform matters. Some customers want flat rate, others want usage rates, and so on. I think it's a key differentiation," says Noble.

By tracking network events more closely means corporates are more aware of abuse of their network -- including virus traffic, which can generate massive and expensive traffic very quickly.

Notorious

The trick for billing and mediation is being able to cope with anything on the network. Customers, whether they are consumers, corporates or content providers, have varying demands about how they are billed. By time, volume, event, item/name or a single price.

Intec's Rocca says his mediation platform can poll every type of network element. "Anything from old-fashioned switches to PSTN switches, right up to log files and servers for I P events and VoD servers."

He calls it "revenue assurance". A recent Gartner report on Multi-Service Mediation, argues that the quality of mediation "will make the difference between profit and loss and ultimately perhaps between success and survival among carriers".

Robin Burton, marketing manager for UK billing provider Cerillion, which implemented the system for BT's showcase 3G network on the Isle of Man, says the carrier wanted a solution that could bill anything.

"We can't tell you what services we are going to have to bill for, or how," Cerillion was told. "You'll have to design something that can cope with whatever we dream up."

Certainly, it's a demanding area. Only four years old, Singapore mobile provider M1 abandoned its original billing system 18 months ago and installed its current platform, provided by Kenan Systems.

CEO Montefiore says at launch the company couldn't find a platform with the capability it wanted, which was to be able to bill for every kind of event.

The next step, he says, is to have greater flexibility in the system. "We want the ability to change the billing engine without having to reprogram it," he says. "That's just not available now -- probably in two or three years it will be."

But that's billing and mediation. CRM, the side that deals with the customer and customer information, has been a major IT industry bandwagon for several years now. It's somewhat notorious because of the hype and the costs involved. Even the most ardent customer relationship management (CRM) vendors admit it is almost impossible to write a realistic business case for CRM solutions based on return on investment; there are just too many variables. Planning and then implementing a CRM project can typically take up to nine months.

For all that, CRM is becoming a central part of a telco infrastructure.

Ming Wong, E.piphany's Greater China sales manager, says an analytical CRM will help a telco both to manage churn and also to run campaigns, based on customer profiling.