book of billing telecoms 1

The Book of Billing for Telecommunications

© Jonathan Hart - PBI Media Ltd 2002 1

The Book of Billing forTelecommunications




- A Billing Primer



A Tarifica Study published by: PBI Media Ltd3rd Floor19 Thomas More StreetLondonE1W 1YSUnited Kingdom

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Web: http://www.billing.co.uk

Researched and written byJonathan Hart

ISBN: 1- 903733-23-5

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Every effort has been taken to ensure the accuracy and completeness of informationpresented in this report. However, PBI Media Ltd cannot accept liability for theconsequences of action taken based on the information provided.

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ContentsThe Book of Billing for Telecommunications 1

1 Introduction 111.1 About this Book ................................................................................................................ 11

1.2 What is so-o-o-o Interesting About Billing? ...................................................................... 12

1.3 The Telecommunications Business.................................................................................. 121.3.1 Deregulation and Competition.................................................................................................... 12

1.3.2 Massive Rate of Change............................................................................................................ 13

1.3.2.1 Mergers, Disposals and Acquisitions................................................................................. 13

1.3.2.2 New Technology, Products and Services.......................................................................... 13

1.3.2.3 Growth............................................................................................................................... 13

1.3.3 Customer Service Focus............................................................................................................ 14

1.3.4 Interconnect Agreements ........................................................................................................... 15

1.3.5 Convergence.............................................................................................................................. 15

1.3.6 Internet....................................................................................................................................... 16

1.4 Challenges for New Entrants............................................................................................ 171.4.1 New Technology Licence Costs ................................................................................................. 17

1.4.2 Choice of Platform, Products and Services................................................................................ 17

1.4.2.1 Forecasting........................................................................................................................ 18

1.4.2.2 Technology changing faster than plans allowed................................................................ 18

1.4.3 Customer Acquisition ................................................................................................................. 18

1.4.3.1 Creditworthiness vs. volumes............................................................................................ 18

1.4.3.2 Customer Service Considerations ..................................................................................... 18

1.4.4 System Selection and Implementation ....................................................................................... 19

1.4.4.1 Requirements Definition .................................................................................................... 19

1.4.4.2 Flexibility and Scalability.................................................................................................... 19

1.4.5 Resources and Expertise ........................................................................................................... 19

2 The Business Processes of Billing 212.1 Why Talk About Processes? ............................................................................................ 21

2.1.1 Strategy and Process Definition................................................................................................. 21

2.1.2 Process Maps Provide Information ............................................................................................ 22

2.1.3 The Need for Business Rules .................................................................................................... 23

2.2 Setting Up Customers & Managing Orders...................................................................... 232.2.1 Order Management .................................................................................................................... 25

2.2.2 Service Activation....................................................................................................................... 25

2.2.3 Fulfilment ................................................................................................................................... 25

2.2.4 Billing Accounts.......................................................................................................................... 26

2.3 Billing ................................................................................................................................ 262.3.1 Recurring Subscription, Access Fee or Rental........................................................................... 26

2.3.2 Billable Events or Usage Charges.............................................................................................. 27

2.3.2.1 Making a Call..................................................................................................................... 27

2.3.3 Credits........................................................................................................................................ 31

2.4 Retail Billing...................................................................................................................... 31



2.4.1 Historical Billing Methods ........................................................................................................... 31

2.4.2 Cycle Billing ............................................................................................................................... 31

2.4.3 Bill Production ............................................................................................................................ 32

2.5 Interconnect Billing and Settlements ................................................................................ 332.5.1 Interconnect Rating .................................................................................................................... 34

2.5.1.1 Interconnect Rating Factors .............................................................................................. 34

2.5.1.2 Least Cost Routing............................................................................................................ 35

2.5.2 Direct and Cascade Settlement.................................................................................................. 35

2.5.2.1 Cascade – Incoming or Incoming Transit .......................................................................... 36

2.5.2.2 Cascade – Outgoing.......................................................................................................... 36

2.5.2.3 Direct Settlement - Outgoing ............................................................................................. 36

2.6 Wholesale Billing .............................................................................................................. 362.6.1 Indirect Access to Our Network.................................................................................................. 37

2.6.2 Indirect Access and Calling Cards ............................................................................................. 38

2.6.3 Resellers and Virtual Carriers .................................................................................................... 38

2.6.4 Basis for Billing Wholesale......................................................................................................... 38

2.6.5 Wholesaler’s Retail Billing.......................................................................................................... 39

2.6.6 Quality of Service Billing ............................................................................................................ 39

2.6.7 Interconnect for Wholesalers ..................................................................................................... 39

2.7 Accounts Receivable and Collections .............................................................................. 402.7.1 Accounts Receivable.................................................................................................................. 40

2.7.2 Collections ................................................................................................................................. 40

2.7.2.1 The Cheque Was In the Post ............................................................................................ 40

2.7.2.2 Automated Collection ........................................................................................................ 41

2.7.3 Restricting Access...................................................................................................................... 41

2.8 Revenue Assurance ......................................................................................................... 412.8.1 The Causes of Revenue Loss.................................................................................................... 42

2.8.2 The Objectives of Revenue Assurance ...................................................................................... 42

2.8.3 Validating Accuracy.................................................................................................................... 43

2.8.4 Fraud.......................................................................................................................................... 43

2.8.4.1 Subscription Fraud ............................................................................................................ 44

2.8.4.2 Premium Rate Services Fraud .......................................................................................... 44

2.8.5 File Controls ............................................................................................................................... 45

2.8.6 Process Controls........................................................................................................................ 45

3 Billing Systems and Billing Data 473.1 System Components ........................................................................................................ 47

3.2 Billing Data Sources ......................................................................................................... 493.2.1 Customer Account Data ............................................................................................................. 49

3.2.2 Product Pricing Reference Data................................................................................................. 50

3.2.3 CDR Generation......................................................................................................................... 50

3.2.4 CDR Stacking and Collection..................................................................................................... 51

3.2.5 Recurring Charges ..................................................................................................................... 52



3.2.6 One-Time Charges and Credits ................................................................................................. 52

3.3 Mediation .......................................................................................................................... 533.3.1 Selection and File Controls ........................................................................................................ 53

3.3.2 Validation and Re-formatting...................................................................................................... 53

3.3.3 Consolidation and Duplication: Mediation Rules ....................................................................... 53

3.4 Rating and Pricing ............................................................................................................ 543.4.1 Guiding and Account Identification............................................................................................. 54

3.4.2 Rating......................................................................................................................................... 55

3.4.2.1 Data................................................................................................................................... 56

3.4.2.2 Other Usage Events .......................................................................................................... 56

3.4.2.3 Applying Rating Factors .................................................................................................... 57

3.4.2.4 Rating Table Dimensions .................................................................................................. 58

3.4.2.5 Split Rating ........................................................................................................................ 58

3.4.3 Rating Discounts ........................................................................................................................ 58

3.4.4 Pre-Paid Service Rating............................................................................................................. 58

3.4.5 Regulatory Issues ...................................................................................................................... 59

3.5 Billing and Invoicing Operations ....................................................................................... 593.5.1 Controls...................................................................................................................................... 59

3.5.2 Billing Cycles.............................................................................................................................. 60

3.5.3 Bill Production ............................................................................................................................ 60

3.6 Retail Billing...................................................................................................................... 603.6.1 Aggregation and the Bill Pool..................................................................................................... 60

3.6.2 Billing Discounts......................................................................................................................... 61

3.6.2.1 Tiered Discounts ............................................................................................................... 62

3.6.2.2 Tapered Discounts ............................................................................................................ 62

3.6.2.3 Free Usage........................................................................................................................ 62

3.6.2.4 “Friends and Family” ......................................................................................................... 62

3.6.2.5 Other Discounts................................................................................................................. 62

3.6.3 Bill Formats & Messages ........................................................................................................... 63

3.6.4 Billing as the Differentiator ......................................................................................................... 63

3.7 Wholesale and Interconnect Billing System ..................................................................... 633.7.1 Interconnect ............................................................................................................................... 63

3.7.1.1 Reconciliation Estimates ................................................................................................... 64

3.7.1.2 Interconnect- Incoming and Transit ................................................................................... 64

3.7.1.3 Interconnect- Outgoing...................................................................................................... 64

3.7.2 Wholesale .................................................................................................................................. 64

3.8 Accounting and Collections .............................................................................................. 653.8.1 Accounts Receivable and Remittance Processing..................................................................... 65

3.8.2 Exceptions ................................................................................................................................. 66

3.8.3 “The Cheque Is In The Post” ...................................................................................................... 66

3.8.4 Bad Debts .................................................................................................................................. 66

3.8.5 Pre-Paid Services ...................................................................................................................... 66



3.8.6 General Ledger .......................................................................................................................... 67

4 Other Systems That Interact With Billing 684.1 Customer Care and the Call Centre ................................................................................. 68

4.1.1 Billing and Accounts Enquiries................................................................................................... 68

4.1.2 Order Management .................................................................................................................... 69

4.1.3 Contact History........................................................................................................................... 69

4.1.4 Complaints and Fault Management ........................................................................................... 70

4.1.5 Problem Resolution.................................................................................................................... 70

4.1.6 Customer Changes .................................................................................................................... 71

4.2 Call Centre Systems......................................................................................................... 71

4.3 Product Management ....................................................................................................... 72

4.4 Service Activation ............................................................................................................. 74

4.5 Reporting and Management Information.......................................................................... 754.5.1 Operational Reporting ................................................................................................................ 75

4.5.2 Data Warehouses and Data Mining ........................................................................................... 75

4.5.3 Churn ......................................................................................................................................... 76

5 Choosing and Implementing a Billing System 785.1 Billing Only, or Something Wider?.................................................................................... 78

5.2 Requirements Definition ................................................................................................... 79

5.3 Buy, Build or Outsource? ................................................................................................. 805.3.1 Buy............................................................................................................................................. 80

5.3.1.1 Advantages ....................................................................................................................... 80

5.3.1.2 Disadvantages................................................................................................................... 81

5.3.2 Build ........................................................................................................................................... 81

5.3.2.1 Advantages ....................................................................................................................... 81

5.3.2.2 Disadvantages................................................................................................................... 81

5.3.3 Outsource .................................................................................................................................. 82

5.3.3.1 Advantages ....................................................................................................................... 82

5.3.3.2 Disadvantages................................................................................................................... 83

5.4 Planning............................................................................................................................ 83

5.5 Testing.............................................................................................................................. 84

5.6 Acceptance Criteria .......................................................................................................... 85

5.7 Migration Projects............................................................................................................. 865.7.1 Data Challenges......................................................................................................................... 86

5.8 Resourcing ....................................................................................................................... 875.8.1 Permanent Staff ......................................................................................................................... 88

5.8.2 Contractors ................................................................................................................................ 88

5.8.3 Consultancies............................................................................................................................. 88

6 Recent and Emerging Changes in Billing Practice 906.1 Electronic Bill Presentment and Payment (EBPP) ........................................................... 90

6.2 Customer Self-Care.......................................................................................................... 91



6.3 Hot Billing and Real-Time Billing ...................................................................................... 916.3.1 Hot Billing................................................................................................................................... 92

6.3.2 (Near-) Real-Time Billing............................................................................................................ 92

6.4 Billing Convergence and Integration ................................................................................ 93

6.5 Billing for Internet Services............................................................................................... 93

6.6 3G and UMTS: Charging for Content ............................................................................... 94

6.7 Quality of Service Pricing ................................................................................................. 96

6.8 The Impact of Commoditisation........................................................................................ 97

6.9 Reducing the Cost of Billing ............................................................................................. 97

Appendix: Glossary of terms

Billing and CRM Reports, White Papers and New Services



List of FiguresFigure 1 Billing’s boundariesFigure 2 New partnershipsFigure 3 Primary business processesFigure 4 Interfaces with billingFigure 5 The order management processFigure 6 The billing processFigure 7 Making a call – 1Figure 8 Making a call – 2Figure 9 Making a call – 3Figure 10 Making a call – 4Figure 11 EBPP – thick consolidator modelFigure 12 EBPP – thin consolidator modelFigure 13 Interconnect settlementsFigure 14 Wholesale connection scenariosFigure 15 The role and scope of revenue assuranceFigure 16 Example – premium rate call fraudFigure 17 ComponentsFigure 18 ArchitectureFigure 19 Customer hierarchyFigure 20 Rating voice and dataFigure 21 Simplest rating exampleFigure 22 Discount schemesFigure 23 The collection processFigure 24 Product management processFigure 25 Principle of the Selection ProcessFigure 26 Outline implementation programmeFigure 27 Programme planFigure 28 Basic Internet chargingFigure 29 UMTS role model



Foreword

Let’s face it - a book about Billing is not something you would expect to see in theBestseller List at airports. If it was, you have to wonder who the hero would be.When Jonathan Hart, the author, asked me if I would consider writing a foreword for abook he was writing about Billing for Telecoms, I agreed in principle - largely because Ihave known Jonathan for a very long time in ‘Billing Years’ - six or seven in real years -and I was fairly sure that he would do a good job.

When he emailed me the final proof, together with a gentle reminder about my promise toconsider writing a foreword, my heart sank, for two reasons:1) I would have to read the book2) I would have to be honest about a book on BillingI made some time. I read the book. I will be honest.

It is very easy to read. It explains complex issues very well, and very clearly. It iscomprehensive, in that it covers issues from wholesale billing to billing for content, frominterconnect agreements to CDR stacks, from customer service issues to EBPP, fromspecifying a system to revenue assurance.

In his introduction Jonathan says: “This book is aimed at readers who are perhaps new totelecoms, who have some business knowledge (maybe from another industry), someunderstanding of information systems (but not necessarily programming)........The book isintended to help the reader understand the process of Billing, the components of Billingand how they fit together, and to be a primer to the training course in billingfundamentals.........”He is right.

I would recommend this book wholeheartedly to those who want to understand theprocesses and systems that lie at the heart of the world of Telecoms Billing, or as a greatstarting point for newcomers who need to be trained in this complex subject.

If there is ever a bestseller list for Billing books, this may well be at the top.

Alex LeslieExecutive DirectorGlobal Billing Association



1 Introduction

1.1 About this Book

This book is about Billing, how Billing works, what happens at each stage in the end-to-end billing process – and why. It describes what is needed in the way of processes,systems and data to make Billing work correctly.This book is aimed at readers who are perhaps new to telecoms, who have somebusiness knowledge (maybe from another industry), some understanding of informationsystems (but not necessarily programming). Alternatively, the reader might be familiarwith billing in other businesses and seeks to understand the differences in billing fortelecommunications services.The book is intended to help the reader understand the process of Billing, the componentsof Billing and how they fit together, and to be a primer to the training course in billingfundamentals developed and delivered by the author. It is not about accounting (exceptwhere billing interfaces with accounting), nor is it about telecommunications (except whereuse of telecoms services generates a primary input to Billing).

Fig. 1 Billing’s Boundaries

Billing

ProductManagement Customer

Service

BillingPreferences

Promotions

Interconnect

Collections

Accounts

Network Usage

MarketingDataWarehouse

Billing Events

FaultManagement

FraudManagement



1.2 What is so-o-o Interesting About Billing?

Primarily, the purpose of Billing is to enable an enterprise to invoice customers correctlyfor the products and services they choose to use. If one acknowledges that the colossalglobal turnover of all telecoms companies has to be processed through some form ofBilling, then what might otherwise have appeared to be a dry subject is put in perspective.If one then applies all the variations in product and service pricing and discount schemes,the range of platforms used, extended by the billions of telephone connections madehourly, Billing can be seen as more challenging and multi-faceted.The telecommunications marketplace is tremendously competitive and dynamic,constantly changing products and services as each operator or service provider seeks tooffer more benefits to prospective customers than its competitors. Hence telecoms billingis in a constant state of change to keep up. Billing is always expected to be able to senda correct invoice for the latest product variation to the customers using it.As a result of the massive growth in the global telecommunications marketplace, Billinghas become an industry in itself. It receives enormous attention and investment, itemploys hundreds of thousands of billing professionals within thousands of specialistcompanies, stages a plethora of conferences on esoteric topics, several times yearly andacross the world, and has its own professional associations. Not a dry, back-officeindustry.

1.2 The Telecommunications Business

Many of the daily challenges faced in Billing arise from the telecoms businessenvironment that billing is trying to serve. The typical telecoms enterprise is incrediblydynamic and fast-moving, requiring many and frequent changes to products and servicesin order to remain competitive. There are a number of reasons for this, some of which arediscussed below, but the net effect is one of constant change. Billing has to cope with allof those changes, in one form or another, and often with little or no advance warning.

1.2.1 Deregulation and CompetitionOver the last decade or so there has been a near universal move to privatise nationalisedtelecoms services, opening up each market for private investment and competition. Thisusually involves the sale of at least a part of the incumbent operator and theestablishment of an independent regulator to ensure that new entrants are entitled to faircompetition against the incumbent. Thus in most countries the situation has changedfrom a state-owned monopoly telecoms operator to competing privately-owned operatorsand service providers.It would be politically incorrect to suggest that the situation simply benefited thegovernment concerned, gaining the large injections of cash from sale of the PTT andobviating the need to provide massive investment capital to bring telecoms infrastructureup to an appropriate standard. In practice, it provided an opportunity to establishcompetitive high quality digital networks to service and enhance commerce and industry,at the same time creating the profession of Billing.



1.2.2 Massive Rate of Change

1.3.1 Mergers, Disposals and Acquisitions

The scramble for market share and revenue leads to a host of inter-corporate activity,whereby companies seek to gain some form of extra advantage. For the resulting newcorporation, a merger implies a combination of rationalisation of products and services,interconnection of networks, consolidation of the workforce and a bigger customer base –as well as eliminating at least one potential competitor. For Billing, the same mergerusually triggers the migration of billing systems, consolidation of whole customerdatabases and the revision of processes and operations. In the telecoms marketplace,corporate activity is frequent, so Billing is always kept busy.

1.2.2.1 New Technology, Products and Services

It didn’t take much arithmetic to calculate the potential revenues from a deregulatedtelecoms market: all businesses and half the population would need or want to subscribe.New customers were attracted to the new mobile services, only to find the handset washeavy, the batteries didn’t last long enough and reception was patchy. Competitorsdeveloped new technology to attract customers to a better transmission network, widercoverage, smaller and more dependable handsets, and so on.All that development was designed to entice the customer to change service provider, andit involved massive advances in technology, production and delivery techniques, until theplaying field became more levelled and there was less perceived difference betweenservice technologies. Then the service differentiator was likely to become more creativepricing, product bundling or attractive discount schemes – all of which depend entirely onfacilities provided from Billing.

1.2.2.2 Growth

From an incumbent’s viewpoint, opening up their monopoly market to competition couldonly lead to a loss of market share, to having a slice instead of the whole pie. Hence, toprevent a loss of revenues, the wise strategy was to increase the range of products andservices on offer, to expand the market and attract new customers – in short, to increasethe size of the pie. This meant Growth.



Growth meant adding whole new ranges of customers, and stimulating additional usageby existing customers. How many of us had a mobile phone 10 years ago? 5 years ago?Now, few do not, and many have several. Growth came from those customers by addingwhole new networks for mobile telephony, new products and new features to olderproducts – such as call forwarding and voicemail, video conferencing, private voice anddata network services, and small business and domestic data services such as ISDN andthe emerging high-speed xDSL connections. That is growth - and Billing has to be able tosend correct invoices to all these new customers for the new service usage.Growth in the global market implied a need for the players to forge new businessrelationships – not just with the banks and financiers, but new partnerships. These haveto be negotiated to enable service delivery over wider geographic areas and provide afuller menu of product features to attract the customers.

Fig. 2 New Partnerships

InterconnectPartner

RoamingPartner

ContentPartner

IndependentService Provider

Reseller

CorporateCustomers

ResidentialCustomers

TelecomOperator

Banks Credit CardOrganisations

Fraud Prevention

Pool

CreditBureaux

1.2.3 Customer Service FocusThe ferociously competitive environment means a real need for high-quality attention tothe customer instead of indifference. Gone are the days when “customer service” meant“the subscriber can wait until it is convenient for us”, because customers now expecttimely and accurate delivery as promised, appointments kept, services available to thestandard advertised, and so on. Spurned or ignored customers are ready and willing tomove their allegiance to your competitors, along with any number of others whoexperience the same or hear of problems.For Billing, a customer service focus means that invoices must be complete and accurate,and the Customer Service Representatives (CSRs) can respond to enquiries promptly,courteously and informatively. It also means that if the CSR needs to grant a credit to acustomer’s account it can be achieved promptly and will be presented on the next bill. Atthe very least, all ordered services must be billed on time and at the agreed price.



1.2.4 Interconnect AgreementsMany connections or calls originate on one network and terminate on another, such asinternational calls or calls from one carrier’s fixed line to another’s mobile. Whenever atelecoms connection is made from a customer of one company to a customer of anothercompany, there is a cross-charge raised from the receiving company to the sendingcompany for making the connection possible. After all, the sending company chargestheir customer, and the receiving company quite reasonably demands a part of thatcharge for the use of their network, for carrying or terminating the call1.Naturally, the charge applies in reverse if the connection is made in the other direction.Since no single company owns all of the networks, this raises the need for commercialagreements between network operators to cover interconnection service levels andcharges.In the past, when carriers were mostly government-owned PTTs, there was only a needfor a few high-level interconnect agreements. The PTT would arrange 10 or 20 or so,mostly at a national level with country neighbours. Interconnect settlement was an almostinformal procedure, and certainly imprecise, since few billing systems paid any attention toit. The volume of traffic passing in either direction was estimated, agreed and settled,usually annually, and almost on a gentlemanly basis – but those were days whensettlement was as much a diplomatic event as commercial. In many cases, theinterconnect charge rate between a given pair of locations was fixed for long periods.This was enshrined in the ‘accounting rate’, fixed and inflexible, published and rarelychanged.With the increase in private ownership and in the number of carriers, came the need formany more agreements. Many agreements were set up as part of a strategy to providecontrolled-cost international pathways between high usage and high recipient markets.As a result, carriers – whether established companies or new entrants – have to organisetypically over 100 agreements from the start of operations.It is now accepted that interconnect charges can amount to as much as 40% ofcontrollable operating costs, and that justifies better precision and information quality.Operators now demand auditable accuracy in accounting for interconnection charges andrevenues. Smaller carriers owning segments of a strategic high-traffic route could findthey receive good revenues from transiting or terminating calls as well as from their owncustomers. This means they might become targets for acquisition – after all, owning thewhole route means the owner gets to keep all the revenue – and at their competitors’ loss.What makes interconnect even more challenging is that an operator’s greatest competitormay turn out to be their best customer.

1.2.5 ConvergenceUntil a common billing platform is established, mergers or acquisitions can lead tocustomers receiving several invoices from the one provider for each of the different typesof telecoms service that the customer used. Invoices might be for mobile, fixed line,calling cards and various types of data services. Consolidating the billing of thesedifferent services from different billing systems is known as ‘convergence’, the art ofcombining the detail into a single invoice per customer per billing period. Convergencecan be achieved by collating the outputs from the different billing systems before the finalinvoice production stage (so-called ‘electronic stapling’), or by enabling one billing system

1 See also: Interconnect Q & A in Billing Magazine 2002 editions atwww.billing.co.uk



to cope with the different product types. This can be quite a complex operation,particularly if the customer is entitled to cross-product discounts.As customers increase the number and variety of services purchased from the carrier, theneed arises to merge billing for all services on to a single bill. Originally, “convergence”encompassed ‘all types of telephony services’, such as fixed-line and mobile, billing foraccess and usage of data, voice and added-value services (conferencing, messaging,etc). When the provider offers other non-telephony services as well, such as television,power, gas or water, then convergence has wider implications than just billing. There areissues of CRM, access to customer database and cross-product marketing and support.2

Convergence is still a major discussion topic in the industry. This is partly because of theeffect of a converged bill on the customer when they receive a combined invoice fordifferent services, aptly known as ‘bill shock’. The market is still unsure whether toconverge billing for widely differing product types, for example, electricity or water withtelephony, even where there is only one company acting as provider. The discussion ismore intense when converging bills for telephony with ‘content’, the published materialsuch as music or movies delivered over the same telephony connection. This is an areathe industry is currently developing, and is discussed later in this volume. Raising manyinvoices might be inefficient for the provider and inconvenient to the customer, but it mightalso be simpler for the customer’s internal processes for invoice approval and payment.The situation is never purely black or white.

1.2.6 InternetOne of the latest billing challenges – and as yet not fully resolved – comes from theInternet. The vast demand for internet access is fuelled by a frenzy, mandating everybusiness to have a marketing website and an e-product, by the consumer’s desire forinstant information and convenient e-services, to communicate from home, to have cheapmessaging by email, cheap long-distance voice calls, thoughts of video streaming, vastamounts of information, chat lines and newsgroups, as well as today’s horoscopes orrecipes. One must not ignore the burgeoning pornography industry, although not manypeople are willing to admit it to be a driving force.The real value to the customer of the internet call comes from the content, from thematerial accessed, purchased or downloaded from a vendor’s website. Hence from thebilling point of view, most of the value of an internet transaction is billed by the contentprovider or website owner, and the lesser value part is billed by the telecoms carrier orservice provider for access by the customer to that content 3.The content billing usually amounts to a standard external credit card charge, facilitatedby secure transfer of the purchaser’s card details. Whether the content material is forexample a music or video clip download, or an item purchased from a catalogue, thechances are high that the vendors (and the credit card company) will receive morerevenue than the carrier or the ISP from the call.From the carrier’s billing viewpoint, internet usage represents a long-duration local orshared-cost call, on a simple connection to the ISP’s point of presence. Some ISPsabsorb the call charge and refund the carrier, making the call ‘free’ to the customer, offsetby advertising revenues. What remains unresolved is how to identify customertransactions with sufficient accuracy, since the download of free material cannot easily bedistinguished from purchased files. What is sought is a reliable identification method that

2 See: PBI Reports 2001: CRM to CMR – a paradigm shift in customer care;Marketing and Billing New Products – a winning combination.3 See: PBI Report 2001: Re-engineering Billing for IP Content.



will entitle the carrier to increased revenues from some form of commission, in return forproviding the connection that enabled the sale.

1.3 Challenges for New Entrants

The biggest challenges face the new entrants. With limited time and by definition nocurrent revenue stream, the entire enterprise infrastructure has to be put in place. Oftenonly a few months are available in order to complete the tasks needed to gear theoperation up to launch the first products and services. Hence all the challenges have to befaced up front, but at least they can proceed without the baggage and old-establishedways of the incumbent. The operation cannot proceed without network infrastructure,whether built or bought, but there will be no revenues without Billing, not even for prepaidservice providers

1.3.1 New Technology Licence CostsIn order to operate as a carrier or service provider, a licence is required, in order tomaintain governmental control over the proliferation of competing services. A newoperator has to buy a licence, if available, or acquire a company that holds one, if not.Setting up a cable-based network, whilst a major capital investment, does not involve asscarce a resource as the radio broadcast spectrum available for transmission of wireless-based services. Hence, except in a few countries, governments tended to conduct anauction for wireless operating licences to ensure the best price was achieved for thebandwidth needed.Competition for the newest licences (for ‘third generation’ mobile – known as 3G or UMTSservices) in Europe and Asia was so intense that huge amounts were invested in thelicences alone – even before any transmission network infrastructure was developed. Theeffect of this investment was doubtless one contributor to the recent fall from grace oftelecoms stocks on world stock markets, as investors question whether future revenuesfrom 3G will yield the returns they desire in a reasonable time4.

1.3.2 Choice of Platform, Products and ServicesThe new entrant has to set the strategy for their business. What kind of services, for whattype of customer and in what numbers? What pricing model would be competitive – giventhe corresponding development and delivery costs? Are they to create their own networkor purchase and resell capacity on an existing network? Mobile, satellite or fixed line?Data or voice? And should the customers be residential, small businesses or largercorporate clients? These choices have a major impact on the choice of operationalmethods and billing platform.In practice, most providers end up offering a combination of services to a range ofcustomer types. Higher performance data networks may imply a team of sales peopletargeting bigger customers paying higher-value invoices, but these are more expensive toestablish and the competition is intense. Targeting smaller customers implies a retailoperation, with larger numbers of customers paying smaller invoices for simpler services,supported through a larger call centre. Billing has to be able to match the needs of thebusiness, to have the capacity to cope with the volumes needed and the products offered.

4 See: PBI Media/Siticom 2001 Report: The UMTS Technology and BillingChallenge.



1.3.2.1 Forecasting

One of the key factors required for successful Billing is an understanding of the way datavolumes are planned to grow over time. The business strategy may set out to achievegrowth from zero to X over the first three years, in terms of customers and revenues, butthis is not always met. One Italian operator had a famous market entry that took theirmarket by storm – customers dissatisfied with the available services moved en masse tothe new provider, resulting in a growth that achieved five years’ business plans in underthree years – and the growth did not stop there. The Billing department was keptexceedingly busy upgrading their IT systems capability two or three times a year to keeppace – something ‘normal’ operators need to achieve much more rarely. Forecasting thatsort of growth is not easy.

1.3.2.2 Technology changing faster than plans allowed

Another challenge is the rate of change of both fixed and wireless technologies.Customer-driven changes such as the massive improvement in usability of mobilehandsets implied a rate of change of inventory as well as cellular transmission capability.These were investments originally planned to be spread over years, that now had to berevised into periods measured in months. Operator-driven changes such as new deliveryservices meant that customers found themselves investing in facilities that were rapidlyoutmoded – rather like the explosion in personal computer price/performance thatrendered equipment obsolete as soon as it was acquired.This situation tended to have a greater impact on the operator’s financial plans than onBilling – except where the billing system or its components had to be upgraded.

1.3.3 Customer AcquisitionThe enterprise needs revenue, so that means acquiring customers. Investors seekgrowth and profits, so that means continually increasing the number of customers and theservices they use.

1.3.3.1 Creditworthiness vs. volumes

The enterprise has a conflicting choice between accepting as many customers as possibleand accepting a higher level of risk of bad debt and fraud. Normally this means that newcustomers are put through some kind of creditworthiness checking, to ensure (as far aspossible) that they will probably pay their bill. This is done either using a credit agency(on a reference service) or by some credit scoring based on information gathered duringthe acceptance process.Easier criteria or lower thresholds for entry mean that more customers will be acceptedwith possibly a higher bad debt rate, and harder criteria means less customers – andperhaps only lower revenues. Management of the new customer entry process is criticalto limit the opportunity for subscription fraud, whereby the ‘customer’ gives false details,never intending to pay. But investors are rarely satisfied, so the entry criteria have to berelaxed to get more customers, more revenue – and risk of more bad debt.

1.3.3.2 Customer Service Considerations

A new product or service needs some level of support from your business. If it issuccessful, then it will need more supporting personnel – if only for the engineeringinstallation service. If exceedingly successful, then the business will require largernumbers of CSRs and installation engineers, in order to meet delivery promises. A niceproblem to have, perhaps, but not if you risk cancellations and disgruntled customers.One way round this is to start out with web-based customer self-care and promote the



approach as an asset – at least as the business grows there will be a lesser need forCSRs.For Billing, customer service means having enough capacity in the CRM systems toaccept orders fast enough to pass details through to the billing system to set up billingaccounts before billing is needed. It also means having enough fulfilment andprovisioning capacity to provide and enable the service before the customer becomesimpatient. Ultimately it means having enough billing capacity to process a day’s work insomething less than a day, so that when the customer phones up to ask something abouthis billing account the data is available in the database, fully processed, ready for the CSRto view.

1.3.4 System Selection and ImplementationWhich systems should the enterprise invest in? Estimating the needs of the business forthe forthcoming few months has to be a trade-off between over-investing before revenuesare there to demand (and fund) the facilities or sophistication, and under-investing thatpotentially gives overloaded system capacity and unsatisfactory performance, at the sametime adding to the workload.There are three main types of approach to providing IT systems capability: the choice tobuild, buy or outsource5. Each may be used for all or any of the system components,according to the preferred IT strategy, financial and human resources available, and theexpected lifetime of the systems.

1.3.4.1 Requirements Definition

The new enterprise has to make some progress in deciding what they expect IT systemsto support. It means thinking about operational strategy, the business requirements forproducts and services, pricing and discounting, how the customer base is to be servicedand so on. Knowing these requirements predicates successful systems decisions, beforeany technical or esoteric IT demands have to be evaluated. It is an important stage indeveloping the definition of corporate infrastructure – and some of the variousconsiderations are presented in a later chapter.

1.3.4.2 Flexibility and Scalability

If the new enterprise does not have a clear picture of the first months of operation, thenthere inevitably has to be an increased level of flexibility in the systems that are installed.Provided that new products and prices can readily be introduced, then there is flexibility.If the systems can accommodate a number of customers and billable events way above orway below expectations, then there is scalability. Ideally, have both until the situationstabilises, if ever it will.

1.3.5 Resources and ExpertiseAt the time of writing, there was a global shortage of skilled telecoms and IT-literatehuman resources6, and the only prospect of the situation changing emerges from thedownturn in telecoms stock prices. This led to another sudden set of changes – a drop infunding for new projects, pressure to reduce costs and downsize IT department’s andbilling operations’ headcounts. In some areas, large numbers of competent personnelbecame available, but overall the demand remains high. 5 See: PBI Media Report 1999: Buy, Develop or Outsource.6 See: PBI Media Report: Telecoms IT, Billing & Customer Care Skills andSalaries Survey 2000. Also the sequel survey in 2001 atwww.globalbilling.org (within the GBA’s Knowledge Bank section)



The new entrant has three choices: to try to successfully attract high-quality permanentemployees, to rely on external resources from consultancies or vendors, or to manageindependent contractors. Not straightforward, because the resource shortage meant thatcandidates were not always as qualified as they claimed. Further, the enterprise was oftennot prepared to invest enough money and effort in attracting, selecting and retaining keypeople from whichever source. The result has been a history of greatly delayedimplementations, launches plagued with problems, appalling customer service – andregrettably often, no bills for months.



2 The Business Processes of Billing

2.1 Why Talk About Processes?

The whole point of having a process defined is so that management can clearly set outjust how they want the business to be run. A number of key decisions will depend on thequality of the process definition – not on its level of detail, but on the amount of high-quality thought that went into its preparation.

Fig.3 Primary Business Processes

Product Management

NetworkManagement

Order Management

Retail Billing

InterconnectBilling

Accounting

Change Management Resource

Management

Legal & Secretarial

Marketing

Supply

Collection

WholesaleBilling

Quality & Revenue Assurance

2.1.1 Strategy and Process DefinitionOne has to assume that the Directorate of a new enterprise has a clear picture of the waythe company is to operate, and this strategy has to lead the statement of what has to bedone to operate the company that way. The process definition states the tasks that haveto be performed at each step along the way, recognising as many business situations ascan reasonably be foreseen. It sets out the tasks along with the business rules so thatpersonnel can interpret and execute those tasks in a manner consistent with strategy.Why is it that so many new telecoms businesses do not define their processes first?Usually, it is simply that the pressures of time and resource overtake good practice in therush to launch the new company, service or product. It can also arise from a lack ofunderstanding of the contribution of process maps to the consequent successful operation



of the business. The adage “more haste, less speed” applies in telecoms just aselsewhere; if decisions normally made when thinking about the process definition areignored or neglected, they will end up having to be made in haste. It will happen whenstaff find they do not know how to handle a new situation that crops up unexpectedly, orthat systems cannot cope.In practice a compromise needs to be reached, whereby the processes are defined at ahigh level, enough to give all parties a structure to work with, yet not in so much detail asto delay the operational launch. The detail can actually be filled in later, as an activity inparallel with service implementation and as the customer base (and the workforce) grows.After all, it is better to actually deliver telephony services to your own customers ratherthan to have meticulous process definitions only to find that your competitors have signedup all the customers. To help with this compromise, a number of template processmodels exist for “standard” telecoms enterprises (some may even be found on theinternet) and these can be used as a guide, modified as necessary.

2.1.2 Process Maps Provide InformationThe process definition is often documented as a map showing the sequence of processsteps and responsibilities. When presented with training, the map informs operations staffhow to recognise each distinct business case (and what constitute exceptions) and theaction to take in each case. The map will also provide information to personnel in otherresponsibility areas, such as quality assurance, information technology, line managementand audit, as to how the business is intended to function.Having the process properly defined will provide a primary source of information to thecompany’s IT people in their selection of appropriate hardware and software platforms.The IT systems should be selected to support the process – not, as is often the case, theother way round. For example, if the business wishes to offer customers access tofacilities for ‘self-care’ via the Internet, it is inappropriate to select a customer care systemthat does not support web access, thereby failing to meet the needs of the business whichseeks to deliver service in a particular way.Knowing the process will help to clarify the interfaces between the various differentinternal business functions and the systems supporting them. In this way, thedependencies are highlighted – and billing can be seen to be at the heart of thecompany’s operations.



Fig.4 Interfaces with Billing

Billing

Product Managers

Accounts

Switches

Marketing

Customers

Call detailsand events

Invoice andcredit detailsUsage

andrevenueinformation

Customer Care

Invoices andcredits

Service Activation

Service activationsand suspensions

Orders, problems andpreferences

Pricing andpackaging

Payments

Orders Billingdetail

2.1.3 The Need for Business RulesA significant contribution to the detail of process definitions has to be the specification ofbusiness rules. These must be defined for each major interaction with a customer orprospect – for example:

! Which pricing and discount schemes may be offered to each type ofcustomer? What threshold business value is needed before each level ofdiscount is allowed?

! What rules apply to credit limits for each type of customer? Does that includethe value of new orders, outstanding unpaid invoices etc?

! What rules are associated with order cancellation? Is the customer allowed tochange his mind without penalty? What if equipment has been delivered andthe installation procedure is nearly complete?

! If your product range includes bundles or packages of grouped productcomponents, is the customer allowed to request a “mix and match”, and if so,what pricing rules apply?

If you have not pre-defined these rules, do not expect your Customer ServiceRepresentatives (CSRs) to know the rules intuitively or to apply them correctly, particularlywhile the customer is on the phone asking to change his order. That’s why these ruledefinitions are important.

2.2 Setting Up Customers and Managing Orders

Somewhere near the beginning of the customer acquisition cycle, an individual or abusiness entity changes from being a prospect ‘out there’ and becomes a customer, bythe act of placing an order. The Order Management (OM) process includes capturing anorder for a product or service from a new or existing customer and fulfilling their



requirements, making it possible for that customer to utilise the product ordered, to thedelivery standard, timeframe and price agreed or promised.

Fig.5 The Order Management Process

TakeOrder

Set upAccount

Network Provisioning

Service Activation

CaptureCustomer

Details

SelectProduct

Collect Billing Data

Product Management

Fulfilment

For OM, it is necessary to complete the tasks set out below. The actual sequence of theindividual steps in the OM process is generally less important than their completion. So,the tasks are:

! Customer identification:

• Capturing customer profile data

• Maintenance and updating of company records! Taking the order:

• Researching and understanding their business requirements from telecomsservices, including service delivery points or sites

• Selection of the most appropriate product and price plan to suit theirrequirements

• Setting out their order, gathering delivery and installation details

• Recording details of their method of payment

• Getting their commitment to the order! Credit scoring or creditworthiness checking! Fulfilment:

• Sending out collateral material, such as contract forms, brochures etc

• Delivering any items not requiring installation (e.g., handsets, smart boxes)

• Account creation and activation! Service delivery:

• Site inspection, engineering planning and preparation



• Despatching (and if necessary, installing) Customer Premises Equipment

• Service activation

• Commissioning and testing! Enabling their first use of your product or service.

For corporate customers, there may need to be a number of additional businessdevelopment steps, including for example, responding to an invitation to tender, perhaps aformal proposal, a demonstration or a pilot scheme. Often, these steps are completed bysales representatives or agents, including field visits to the potential customer, so theprocess will ensure the details of prospective customers who are progressing towardsorder completion (‘in the pipeline’) are notified to sales management for planning andcontrol purposes.

2.2.1 Order ManagementResidential or small business customers may be satisfied with placing orders by email orletter, directly by telephone, or by completing a form from a brochure or website.Wherever there are larger volumes of customers with smaller orders, the efficiency ofhandling each unit becomes more significant.Of course in some cases a customer might seek to cancel or change an existing order, sothe process must allow for such events and set out what else needs to be done at thattime. The rules must be defined so the sales representative or CSR knows how to dealwith each situation, and to correctly advise the customer the costs incurred by the changeor cancellation.

2.2.2 Service ActivationThe network (or the service platform) has to be notified that the customer is authorised tohave access to and use the service. Activating the customer thus involves telling thenetwork management system that the customer’s calling number or account number is tobe recognised, perhaps with a PIN. Then the authorisation parameters will specify, forexample, the type of service and priority (if any), whether or not premium rate orinterconnect calls (long distance, off-network or international) are allowed. The activationmay also involve setting up additional service features such as voicemail or call waiting.After the customer is set up on the network, additional service management commandsmay need to be applied from time to time, such as service suspension or reactivation, callbarring (prevent calls from specific calling numbers) or exchange barring (block calls tocertain exchanges or ranges of numbers). The service identification is typically the CallingLine Identification (CLI) that the customer uses.

2.2.3 FulfilmentAfter receiving the customer’s order, it is customary to send some form of documentation,including welcome letters, copies of contracts and equipment operating manuals. If theservice provision requires Customer Premises Equipment (CPE) to be fitted then theFulfilment process will include scheduling site visits by installation engineers, stockmovements (if the CPE is taken from inventory) and perhaps preliminary surveys.For high-volume residential services, it is quite common for the fulfilment tasks to beoutsourced to companies with specialist packing and mailing service facilities.



2.2.4 Billing AccountsOne of the last preparatory steps is to set up an account for the customer. This willrequire details of the correct address for posting invoices, their preferred method ofpayment and bank account or credit card details as applicable. The process step is notcomplete until there has been verification of those details – sending a Direct DebitInstruction to their bank would elicit a negative response within a week or so if there was aproblem, and checking credit card details can be done on-line.

2.3 Billing

Billing is the process of gathering details of all items that are to be charged to thecustomer, then calculating the price of each, applying any discount and calculatingapplicable taxation, and finally preparing an invoice to convey the debt to the customer.There are generally three types of charge:

! Recurring subscription, access fee or line rental! Billable Events or Usage Charges! One-Time Charges and Credits

Fig. 6 The Billing Process

Product Management

Rating

Billing

MarketingBill

Production

Collect Event Data

Mediation

Accounting & Collection

Set up Account

Product Management

Fraud Management

Marketing/ Data

Warehouse

Use Service

Interconnect

Wholesale

2.3.1 Recurring Subscription, Access Fee or RentalThere is usually some form of recurring charge that is levied either on each billing cycle orat some other agreed period, for example, a monthly line rental or a quarterly subscription.This exists partly in order to recover the initial cost of providing the service to thecustomer, but also simply as an ongoing revenue stream. It also helps to underpin profitsand cover equipment maintenance. Billing has to add the charge to the invoice at theappropriate time, properly itemised.



2.3.2 Billable Events or Usage ChargesSince usage of the telephony service is rarely restricted to telephone calls only, the termBillable Events is used to refer to any event that consumes or makes use of the service forwhich the customer has to pay, even if it is provided at no charge. Usage can includecalls, retrieval of voicemail messages, data file transfers and downloads, or directoryenquiries.In cable networks, pay-per-view charges may be levied per film or sporting event. Thekey data required for Billing an event is usually known as the Call Detail Record (CDR),although the interchangeable term ‘Event Record’ is valid for the more generic billableevent. CDRs are generated by the telecoms network systems for every call, containingenough data for billing to work out how much to charge and to which account it belongs.

Fig.7 Making a call - 1

A B

CDRs

Local line

NMS pollsswitches tocollect CDRs

Switch

2.3.2.1 Making a Call

The sequence of events in making a call is broadly summarised in the accompanying setof diagrams. When Party ‘A’ lifts the receiver, the connection is made to the nearestswitch in the network. The network is shown as a ‘cloud’, representing all the complexconnections, engineering and technology involved in the network of the particular operatorconcerned. For the purposes of this book, we do not need to disassemble the cloud muchfurther.



The switch checks the CLI to ensure the customer is allowed to proceed and thenreceives the dialled number as a string of digits. The switch determines the best routingfor the call and directs it across the network to the called party ‘B1’. As the call isconnected, a CDR is created by the switch to await collection by the NetworkManagement System (NMS).

Fig.8 Making a Call - 2

A B

CDRsFile transferto Mediation

Mediation

Billing

Alternativerouting

Regardless of the routing, all the switches involved are all capable of creating CDRs,depending on their current set of control parameters. When the CDRs are passed toMediation, all duplication of CDRs for a given connection is resolved.



Fig.9 Making a Call - 3

A B1 B2

CDRs

CDRs

CDRs

Originator

Terminator

Transit

Gateway

Local line

Mediation

Billing

Interconnect

CDRs also sent toInterconnect billing

A

CDRsFile transferto Mediation

Mediation

Billing

Alternativerouting

If the connection requires interconnection of networks, then our switch directs the call tothe Gateway, the point of interconnection. The call may transit a number of networks untilthe terminating network is reached and the call routed to its destination, ‘B2’.Along the way, switches may each generate CDRs for use of the host network, but atleast one must be passed back up the chain towards the originator. Again, our Mediationhas to resolve duplication of CDRs, but those CDRs sent from neighbouring networks aremost useful for interconnect billing.



Fig.10 Making a Call – 4

A

CDRs

CDRs

CDRs

Originator

Terminator

Transit

Gateway

Cell

Roamingdatabase

Local line

Mediation

Interconnect

Billing

B1 B2

At a high level, the same set of principles applies to Mobile calls, with the addedcomplication of Roaming. When a handset is turned on, it broadcasts its identity to thenearest cell, which registers the handset for position and checks the central database forvalidity of the handset owner’s account. Assuming all is well, a call placed by ‘A’ is routedas before, generating one or more CDRs along the way.If the called party ‘B2’ happens to be roaming on another network, then validity of B2’shandset has to be checked with the owner’s home network before connection is allowed.When the handset is switched on within another host network, the nearest cell transmitterfirst of all checks its local database to determine if there is a roaming agreement with theowner’s home network operator. If so, then the host checks back at the owner’s hostnetwork if the owner is permitted to roam and is willing to accept roaming charges. Theresulting information is stored locally for billing convenience. The transaction involves aremote database check, a process that may take several seconds. If cleared, the handsetlocation and identity is logged. Hence when A calls B2, both the home and remotenetworks know where B2 is at the time, so the call can be correctly routed.As before, at least one CDR is sent back to the home network for retail billing, and a copyis retained for interconnect billing by the roaming host. Note that: roaming is themechanism that allows a mobile customer to use their mobile phone outside theiroperator’s ‘home’ service area. Interconnect is concerned with delivering a call to anotheroperator’s network7.

7 See: Interconnect Q & A by Martin Browne, Billing Magazine Jan/Feb 2002– at www.billing.co.uk



2.3.3 CreditsIf for some reason the customer complains about the service, or disputes the charge forindividual connections, we may choose to refund their costs and/or give them an ad-hoccredit. This aims to offset the customer’s inconvenience, and should be recognised on thenext available billing cycle. The Customer Service agent or CSR therefore has to havefacilities to raise the credit, and the billing system consequently needs to be able topresent these credits or refunds, separately itemised, as part of the next bill.

2.4 Retail Billing

The subject of retail billing covers the calculation of charges and raising invoices for end-user customers. In this category we tend to include normal domestic and small businesscustomers (also known as Small Office / Home Office customers or ‘SOHOs’) and manyof the medium to large corporate customers. Very large customers or substantial users ofcapacity may have their own contracts, perhaps with their own pricing and discount plans– these are discussed separately under “wholesale billing”, to make the distinction.

2.4.1 Historical Billing MethodsIn earlier days, telephony was provided by nationalised providers, almost universallylinked to the Post Office (hence the acronym PTT, for “Post, Telephone and Telegraph”services). The amount charged to the customer for telephone usage was measuredmanually. The telephone operator (here meaning a person tasked with making theconnections, rather than an enterprise) was responsible for monitoring call duration,mainly by sampling (basically listening in) to see if a conversation was still in progress.The operator assessed the duration to the nearest minute or so, and wrote down thelength of each call. The manual records were processed by an array of back-officeclerical personnel and somehow a bill emerged.Later, the operator was replaced by automatic pulse-dialled switching equipment andautomatic measurement of call duration. This was supported by telemetry, setting pulsesor ‘clicks’ at a rate given by the distance of the call or the number of switches involved ncompleting the connection. Billing comprised ‘counting clicks’ for the line concerned. Theamount billed was simply the number of clicks multiplied by the prevailing unit rate.These billing techniques still prevailed in some countries until quite recently, but wereultimately thrown out by customer pressure – they were unauditable. Customerscomplained of excess bills, mostly to no avail. Unfortunately, such complaints wereineffectual as the onus was on the customer to pay, regardless. It did not matter thatexcess ‘clicks’ coincided with nearby repair work by telephone engineers making lots ofclicks on the line – the customer still had to pay.

2.4.2 Cycle BillingIn order to avoid processing all of the customers at the same time – traditionally at the endof the month – the workload is distributed over the calendar month. Business customersmay prefer end-of-period billing, but retail customers are usually less concerned.Consequently, each customer is assigned a cycle day or cycle number, to allow thedistribution of billing by Operations personnel according to IT workloads.On the date set according to the billing cycle, the process has to assemble all the accruedcharges for each account billable on that date. This will aggregate charges that havebeen raised since the previous bill. There are normally up to three types of charge:



! Usage Charges, in the form of rated calls, transactions or events. Chargesare based on minutes of duration, quantity of data carried, fixed set-up cost,etc

! Recurring Charges, representing periodic access fees, subscription charges orline or equipment rentals

! One-Time Charges, any ad hoc charges for specific events such as equipmentsale or initial set-up fees.

For every account, Billing will aggregate the charges, usually sorted to present them bydate and time within product or service. Depending on the contract or price plan, theremay be a discount or ‘included free minutes’ which has to be deducted if applicable.Finally the Value Added Tax (VAT) or Government Sales Tax (GST) is computedaccording to the tax jurisdiction, rates per product or service, or other rules. In somecases the tax has to be computed for the total undiscounted charge and separately for thediscount (or any other credits), depending on the relevant legislation. Either way, theresult has to be presented as clearly, completely and as accurately as possible.

2.4.3 Bill ProductionThe final stage of this step in the process is bill production, whereby the invoice isprepared and printed. If itemised billing is required, then details of each chargeable eventhave to be listed, usually in start date/time sequence within product, and then within CLI ifmore than one calling number is involved in the contract. Whilst traditionally it waspresented on paper, it is less costly and more convenient for larger accounts foritemisation details to be presented on floppy disk or CD-ROM.

The most recent developments in this area note that customers are very often happy toaccess their itemisation data through a secure internet web site, and to be notified by e-mail of the total. At the time or writing, legislation in Europe generally still demands thatthe invoice itself is presented on paper, but co-operative business partners are findingconvenient ways round this, usually involving e-mail. The era of EBPP (Electronic BillPresentment and Payment) is undeniably upon us8.

8 See: PBI Media 2001 Report: EBPP – The Market Opportunity



Fig.11 EBPP – Thick Consolidator Model

BILLERSCONSOLIDATOR

ALL BILLING INFO

CUSTOMER

Source: © PBI Media Ltd

Fig.12 EBPP – Thin Consolidator Model

BILLERSCONSOLIDATOR

SUMMARY INFO

CUSTOMER

SUMMARY INFO

FULL DETAILS

FULL DETAILS

SUMMARY INFO

Source: © PBI Media Ltd

2.5 Interconnect Billing and Settlements

Whenever a customer places an outgoing call or makes a connection that terminates in adifferent network, then an element of Interconnect billing applies. The other operator willexpect to be paid for use of their network to carry the call part of the way. After all,operators are paid by their own customers to carry traffic wherever it terminates, but sincethey cannot charge another network’s customer, they charge the other network operatorinstead9.

9 See: PBI Media White Paper: Interconnection – Practical Guide toInterconnection in the UK



Similarly, we (as an operator) might receive incoming calls that originated on anothercarrier’s network to terminate on our network. We will then seek to charge the otheroperator for the use of our network facilities. A similar situation applies in both cases ifcalls are carried in transit to another operator’s network.The total volume and value of calls may not be the same in both directions, and the totalsmay amount to very large numbers, so an Interconnect billing system providingappropriate functionality is needed to keep track. The interconnect billing process raisesinvoices to other carriers for terminating or transiting their calls, and produces reports forcalls sent to (or via) other carriers for reconciliation against invoices received from them.The outcome is that every call or event, except those that start and end on the samenetwork and that do not transit any other networks on the way, is subject to some form ofinterconnect charge, in one direction or the other.

2.5.1 Interconnect RatingThe complexities of interconnection mean that the CDRs or Event Records generated byour network have to be examined several times for different processing tasks. Firstly, weselect event records for calls that originate from our own customers on our network fornormal retail billing. Of those retail event records, we then select the subset of events thatterminate on or transit across another network, to calculate the interconnect costs – forreconciling the other carriers’ invoices. We also need to select other event records thatare generated on our network for incoming or transit calls, to calculate interconnectcharges for billing the other carriers.The amount we have to pay the other operator to carry the call will depend on a number ofrating factors. The charge rates are set out in Interconnect Agreements, negotiatedbetween operators whose networks are interconnected, to cover traffic in each direction.As telecoms capacity is increasingly sold on a commodity basis, interconnect has becomea highly competitive arena, with any number of new rates and charge methods setbetween different pairs of operators. The rates will be updated from day to day, frominterconnect partner to partner – between the same points and even for different periodswithin the day. Therefore the operational staff who run the interconnect billing system willhave to maintain rating tables that change dynamically. Unfortunately, we do not alwayshave all the up-to-date detail of costs beyond the neighbouring carrier, partly because ofthis rapid rate of change and partly because they like to keep certain aspects of theiroperation confidential. This makes some aspects of interconnect reconciliation more thana little difficult.

2.5.1.1 Interconnect Rating Factors

Rating factors will include conventional factors used by retail, for example, the callduration or amount of data carried and the quality or speed of connection. However,interconnect rates also depend on the routing used – in other words, who carried thetraffic, across which different networks, and to which destination exchange or connectionpoint.For example, if a caller on network A placed a call to a dialled number on network E, therecould be many different routes to get there: perhaps A-B-C-E, or A-D-E, and so on.Given that each network is a different competitive entity, it is to be expected that the costto operator A for sending the call to E will vary according to the terms negotiated betweenA and each interconnecting carrier, whereas the price (to the customer) will usually befixed.There can be slightly bizarre outcomes – sending a call from Germany to UK, for example,might be routed via the USA rather than through France or Benelux. It is not distance that



matters with telephony, it is cost – digital signals can be re-amplified a number of timeswithout loss of integrity.There will usually be a call set-up cost component, payable even if the call is notsuccessful from the customer’s viewpoint – the sender “pays for trying”, as it were,whereas the customer does not.

2.5.1.2 Least Cost Routing

To minimise the cost impact by careful call routing, switching systems are increasinglyincluding a ‘Least Cost Routing’ (LCR) capability that permits interconnect calls to berouted in real time according to the LCR algorithm. Wherever possible, the switch willtake into account the latest known charge rates in deciding the routing of a connection.

2.5.2 Direct and Cascade SettlementThe overall interconnect accounting process is also called ‘settlement’. Two commonforms of settlement (and several others) exist. The common forms are Direct andCascade, and operators generally use both. Direct Settlement is where the operatorsettles separately with each carrier involved in routing the connections. CascadeSettlement is where the operator pays the first in the transit sequence, they retain theiragreed share and pay the next, and so on. In many cases, we may not be informed of therouting taken beyond the first, for commercial confidentiality reasons, so Cascadebecomes the settlement of choice.

Fig.13 Interconnect Settlements

Cascadesettlement

Directsettlement



Other models exist, depending on the extent of collaboration between interconnectpartners. One is ‘Sender Keeps All’, on the questionable assumption that traffic in theother direction should be similar in volume.

2.5.2.1 Cascade – Incoming or Incoming Transit

For incoming calls, we will transit or terminate the call on our network, so we expect toreceive revenue from our neighbour. The first step of the cascade identifies the operatorto whom we handed the call, so the basis of charge can be determined from databasedetails of our agreement with that operator. The cost is calculated and allocated to theinterconnecting operator’s account. This time, however, we are calculating the amount weare expecting to be billed by the neighbour concerned, in order to reconcile their invoicewhen it is received. If that operator does not have the necessary interconnect expertise orbilling software, we can use our figures as a basis for settling their account. It is commonfor an added-value fee to be earned for providing this service.

2.5.2.2 Cascade – Outgoing

If we are carrying the call in transit to another network, then provided a cascadeagreement exists we will need to pay that carrier. We generally use the CDRs wegenerate at point of exit, depending on the systems architecture and on whether the calloriginated with one of our customers.

2.5.2.3 Direct Settlement - Outgoing

When settling on a Direct basis, we need to know all the carriers involved in a routing, tobe able to apportion the revenue according to the rules for that routing. Where threecarriers (including the sender) are involved, a typical apportionment is 40%-20%-40%respectively; when it involves four, it is 30%-20%-20%-30%. This reflects the importanceof the originator and terminator of the call compared to the transit operator – perhaps lesscomplexity or equipment involved. Use of non-standard rates is almost as common.

2.6 Wholesale Billing



Wholesale billing means that we contract to provide another company with bulk use of ournetwork, perhaps between fixed points. What we bill the wholesale customer, and how,will depend on how their customers access and use our network as well as on thewholesale contract. The wholesaler’s traffic will include interconnect, so again we mayhave to analyse that traffic for interconnect costs and revenues, depending on what isnegotiated in the contract.They might appear to us as a major user (perhaps a multi-national with offices worldwide)or as a reseller. It may be that the wholesaler has negotiated bulk rates from us forthemselves as a single company or in effect a closed user group. They might thenchoose to bill their own internal cost centres as a cross-charge for telephony usage, withor without a margin.They will at least require from us an analysis of their traffic, selected out from the totaltraffic. Normally a data feed of CDRs is required from the wholesale billing system, so thereseller can perform his own analysis and as input to their own retail billing (or, quiteconceivably, wholesale billing).

Fig.14 Wholesale Connection Scenarios

Customer ofWholesaler - andof Host network

Wholesaler’s network

Host networkLocal

line

Alternativecalled partyconnections

Indirectaccess

Directaccess

Indirect Access to Our NetworkIf the wholesaler has their own network, they will probably set up dedicated points ofaccess for interconnection with our network. These points are usually controlled byintelligent switches, able to validate and route the traffic as well as generate their ownCDRs – as we will, at the coincident points of access on our network. In this case, ournetwork will provide some element of bulk or long-distance support for the wholesaler’soperation.



2.6.1 Indirect Access and Calling CardsWith an Indirect access model, the caller uses ‘last mile’ access to reach the wholesaler’snetwork. The first part of the dialled number string is the indirect access prefix, whichroutes the call to the wholesaler’s point of access. The wholesaler’s system then checksthe caller’s identity from either the CLI or from the next part of the dialled number string,that may include an account number or PIN, before routing the call to its destination.A variant of Indirect Access is the pre-selection model, where the end-customer will opt tohave all calls routed through the wholesaler’s network. They will remain the customer ofthe operator for the last mile, but again only for line rental. The operator will need to routeall calls from that CLI to the wholesaler without necessarily having a dial string prefix.Instead, a list of pre-selection CLIs has to be maintained at the nearest switch.For the Calling Card model, indirect access is provided by any customer’s last mile, suchas from a hotel room, private line or pay phone, to the wholesaler’s point of access.CDRs for calls to the indirect access point are recognised and charged according tocontract but generally on some aggregation of time, distance and total duration. Thewholesaler often requests a high-priority feed of their CDRs in order for them to be able todebit their customer’s account as soon as possible.If the wholesaler provides a pre-paid card service, whereby fixed-value cards are soldthrough retail shops or other outlets, the remaining credit on the card has to be checkedbefore completing the circuit and again during the call. The functionality to support this isoften provided at the switch, theirs or the network operator’s.

2.6.2 Resellers and Virtual CarriersThe wholesaler may in fact own no network infrastructure at all. They may be acting as areseller or even as a ”virtual carrier”, whereby all of their network resources are providedand owned by other operators. We will have to recognise their traffic, either from the CLI,the point of origin of the caller or the called number, and provide a file of CDRs to thewholesaler as part of the billing detail.The business of servicing a Reseller can follow a number of similar models, for example:

! selling bulk minutes (often over nominated routes) for competitive retail sale! selling data capacity, in terms of megabits or gigabits per second, perhaps

between specified access points or nodes or for specific time periods in theday

! leasing specific lines or circuits or set portions of larger-capacity trunkconnections (e.g. a satellite transponder, or a fibre pair of an optical cable).

The implications for billing are that invoicing refers to the contracted register of servicesper customer. Charges may be calculated according to the contract rather than using apublished tariff. The rating factors may include the routing involved, the prevailing price(that may be a variable) or the actual usage.

2.6.3 Basis for Billing WholesaleWholesale billing may comprise line rental or capacity rental (e.g. leased circuits, satellitetransponders or fixed transport capacity), not necessarily with charges for actual usage.For dedicated connections, usage is often not considered relevant. The price we chargethe wholesaler can be based on anything from a very simple formula to complex billingalgorithms, for example:



! Flat rate, fixed amount per month! Discounted variable rate, based on standard retail factors (time of day,

exchange pairs)! Rated individual CDRs, charged at wholesaler-specific rating factors! A currency multiple of the total number of minutes or megabytes per period! Variable rate, based on quantity thresholds! Fixed margin over transport and/or routing cost.

Except for the simplest formulae, we will need to process CDRs generated on ournetwork. We have to recognise CDRs that ‘belong’ to the wholesaler, whether they will bepassed to the wholesaler or not. Calls that we carry on behalf of the wholesaler have tobe regarded simply as ‘traffic’ on our network, since we cannot bill the end-customer on aretail basis. If it is our last mile and the caller is also our customer, we can bill thecustomer only for rental of the ‘last mile’ access to our network, and not for the call.

2.6.4 Wholesaler’s Retail BillingHow the wholesaler bills their retail customer will depend on their business model – wewill only be concerned with our contract with the wholesaler. What matters to us iswhether the wholesaler will require for that purpose a file or data feed of rated or unratedCDRs generated on our network.The wholesaler may bill their customers a number of ways:

! Pre-paid access cards – this assumes an access control mechanism at theircustomer’s point of access to the network to check the card when the call isplaced. It will also need to rate the calls in real-time in order to stop the callwhen the customer’s credit expires.

! Using their own CDRs – they will use their own billing system. We will need touse CDRs from our network to generate the wholesaler’s invoices.

! Using our CDRs – we will pass a file of CDRs to their billing environment. TheCDRs may be rated or unrated, depending on whether they requirereprocessing using their own retail call rates.

2.6.5 Quality of Service BillingIn data services, ATM for example, there may also be a contracted ‘quality of service’(QoS) component to the charge. In this case a discount is applied if the service levelachieved is less than the level agreed in the contract, typically measured in terms ofactual data transfer rates and error levels experienced. In such cases, a record of themeasure for the billing period has to be provided to Billing, in order that the correctdiscount can be applied. However, one challenge is to be able to measure QoSautomatically and accurately – most often it is derived as a result of manual assessment.

2.6.6 Interconnect for WholesalersWe also have to take into account what happens to interconnect costs and revenueswhen deciding the pricing basis to the wholesaler. All CDRs that are generated for thewholesaler’s customers have to be examined for any interconnect cost or revenuepotential. If the call terminates on another network, we are liable for the interconnectcharge and will seek to recover it from the wholesaler. If the wholesaler’s end-customeruses our network to get to the wholesaler, and the call terminates on our network, weshould be able to recover interconnect costs independently of the wholesaler’s bill for their



customers’ access through our network – but this may be taken into account in thecontract.Innovative pricing models currently being offered include a ‘fixed margin over cost’ option,whereby the price is based on our costs. Here, we clearly need to determine anyinterconnect charges we incur. Hence to bill the wholesaler, we need to rate the CDRs forinterconnect charges, possibly add a call set-up cost element, and then add the agreedmargin, thereby using both the interconnect billing system and the wholesale billingsystem (if different) for this process.

2.7 Accounts Receivable and Collections

There should not be much confusion between billing and accounting, but occasionallysome of the IT people have been known inadvertently to blur the distinction.

2.7.1 Accounts ReceivableOnce a billing system has computed the total amount to be invoiced on this cycle for agiven customer, details have to be passed to Accounts Receivable (A/R) so that thecollection of monies due can be prepared.According to the customer’s preferred method and date of payment, A/R will set up acollection file, containing details of the Direct Debit or Credit Card transfer for eachaccount. The amount will be collected automatically on the specified date, unless thecustomer raises an objection before the collection file is despatched. If the customer is topay by cheque, then one has to wait until it arrives, goes through Remittance Processingand is presented to the bank for clearance a few days later.In the event of an enquiry by the customer, the CSR first clearly identifies the customer(for security reasons), before revealing their account details. If the CSRs look in A/R forthe debtor’s ledger to determine how much money that customer currently owes, then allis well. If they look only in the retail billing system, they may overlook other debts owingfrom wholesale or non-telephony sales recorded in other billing systems. It may also bethat the billing system ‘assumes’ the debt is collected, on the basis that A/R is a separatesystem. A/R generates the collection file and assumes that the debts will be collected,whereas the bank might have other ideas for some account holders. It all depends howpedantic one chooses to be in answering the enquiry, and in such matters, accuracy isbest.

2.7.2 CollectionsThe objective of the Collections process is to bank the highest possible percentage of theamounts billed. Why not all of it? Well, unfortunately, not everybody actually pays.

2.7.2.1 The Cheque Was In the Post

Traditionally, payment was made by cheque sent in the post, or by cash deposited at thebank. If payment was not received within a specified number of days after due date, thecollections reminder process was initiated. This involved sending increasingly stridentreminders to the customer in the hope they would remember to send in the payment. Ifnothing happened, there was the option of sending the debt to an external collectionsagency specialising in applying pressure, always able to come to an arrangement if thecustomer was in temporary difficulties. Finally, there was the ultimate option for legalproceedings and other expensive means of indicating extreme displeasure at notreceiving the monies due.



2.7.2.2 Automated Collection

However, the contemporary process is more likely to include a very high proportion ofautomated electronic banking transactions. When the customer’s invoice is raised, arecord is generated by the billing system or from Accounts Receivable (depending on thesystems configuration) according to the customer’s preferred method of payment. A file ofthese records is generated and sent to the bank or credit card agency, just in advance ofthe due date. The bank then transfers the requested funds from the customer’s accountto the provider’s account, and all is complete until the next billing cycle.Unfortunately, not all customers have sufficient funds, so a number of the transferrequests are rejected by the bank. The bank may automatically re-present those a fewdays later, but in many cases the request is returned to the telco. The traditionalcollections reminder process can be followed to some extent, depending on the bank’srules regarding automated transactions. In some cases, the amount can be collected nextcycle, provided the customer is notified in advance – or it may be necessary for the directdebit instruction or credit card mandate to be renewed.

2.7.3 Restricting AccessOne way of encouraging reluctant debtors is to restrict their access to the network. Thiscan be introduced in stages, perhaps first by inhibiting international calls and premiumrate services, later by interrupting calls, finally by suspending the service completely(except for emergency calls). Normal service would be resumed as soon as payment isreceived – and we would probably be a little quicker to introduce restrictions were it tohappen again.In repeating patterns, we may ask the customer for a deposit as part-payment in advance.It depends on how valuable that particular customer is considered to be, or how exclusiveour service is. Local custom may play a part – in some Asian countries the bill ishabitually not paid until the service is actually cut off, so the provider has to allow for thisand treat it as normal.One European mobile operator initially sends out text messages every time a late-payingcustomer tries to use the service, reminding that the bill is overdue – and with somesuccess. Another common technique is to redirect all outgoing calls via the call centre, sothat the customer can be firmly but politely reminded to pay up. These restrictions are, ineffect, a firm but courteous reminder that the debt must be settled.

2.8 Revenue Assurance

The purpose of the Revenue Assurance process is to minimise revenue loss. TheRevenue Assurance process is a methodical inspection of every step in the end-to-endbilling process to ensure each step is performing correctly, together with the instigation ofcost-effective remedies where errors are found and correction is feasible.Revenue Assurance seeks to review everything that contributes to Billing, the referencedata, the transactions, the calculations, working practices and systems, to quantify anyleakage and determine its source. Given that Billing is complex, the Revenue Assuranceprocess has a lot of ground to cover10.

10 See: PBI Media Report 2001, Successfully Managing Revenue Assurance;

Margin Management Briefings 2002 – applying Revenue Assurance to yourbusiness.



Fig.15 The Role and Scope of Revenue Assurance

CustomerServices

Collections

CreditManagement

Products &Services

Mediation

Customers

Marketing

Networks

Billing

PerformanceMeasurement

FraudFraudManagementManagement

CRMCRMPoliciesPolicies

ProductProductAssuranceAssurance

BillingBillingAssuranceAssurance

Source: PBI Media Ltd

2.8.1 The Causes of Revenue LossRevenue losses or ‘leakage’ can potentially occur at every step in the billing process. Asuccession of small errors and processing flaws can compound together to result in theenterprise receiving less revenue that they are justly entitled, on average amounting toaround 10% of legitimate billable revenue. Another aspect is fraud, the intentionalavoidance of payment for use of your services.

2.8.2 The Objectives of Revenue AssuranceThe objective is to maximise received income for the enterprise, to ensure that, as far aspossible:

! All customers are legitimate entities with impeccable credit ratings! All usage is captured and billed correctly! All bills that are sent out are completely accurate! All customers due to receive invoices do so



! All revenue is collected from customers when due! All fraudulent access and use of services is eliminated.

Failing perfection, we compromise by seeking to achieve the optimum outcome, a trade-off between commercial risk and practical reality. Revenue Assurance will establish andmaintain techniques to ensure, as far as possible, the integrity of the end-to-end billingprocess.In practice, Revenue Assurance is a continuing battle against a series of minor failuresand accidental errors, faulty equipment and software bugs, oversights or weaknesses inthe ordering and billing processes. In effect, the objective is to minimise damage. Acarefully-designed series of process controls has to be implemented that trap errors assoon as possible, highlighting when data is dropped, customers are overlooked, revenueis not collected, and so on.The RA process is one of investigation and analysis, to ensure the highest proportion oflegitimate revenue is being billed correctly, and that the minimum is lost through bad debtor fraud.

2.8.3 Validating AccuracyThe primary tasks in RA processes are to ensure:

! Accuracy and completeness of all billable event records from any source! Correct computation of all billing transactions! The correct delivery of all products and services! Consistency of billing with contracts and tariffs! Fraud is reduced and maintained at acceptable levels! Effective Accounts Receivable and Collections procedures.

One of the outcomes of Revenue Assurance is the identification and elimination ofweaknesses in the end-to-end process. This can be caused by ineffective financial orprocess controls, the occasional misinterpretation of business rules - or by managementnot exercising enough attention to detail, resulting in poor execution of the process.Another source of weakness arises from products that are available but are not selling insufficient numbers, or give higher than average levels of operational problems orcomplaints. Dealing with problems incurs unwanted extra costs, from staff time dealingwith the complaint to the cost of warranty claims or repairs.

2.8.4 FraudWhat presents an ongoing problem for the provider is the “F-word”, Fraud. The definitionof Fraud encompasses all access and use of network facilities where it is the deliberateintention of the user to evade payment. It may be “only” theft of electrons – and it is hardto maintain an inventory of them – but it is a criminal activity.If the customer has not paid, does the provider know whether the customer is bona fide ornot? They have to balance the chance of collection problems against the potentialrevenues, performing an amount of checking before the service is first made available –whatever is considered ‘reasonable’.



The cost of fraud prevention should be in line with the amount of revenue lost. Lossesshould not be seen simply as revenues that cannot be collected, bearing in mind thatthere are real costs associated with fraudulent interconnect, premium rate or shared costcalls. A load on the network from fraudulent use might also interfere with real customers’quality of service. What should be avoided (this has allegedly occurred) is making acapital investment to upgrade network capacity, only to find it is mostly used to supportfraudulent traffic.The accepted wisdom is to make life as difficult as possible for the defrauder (single useror large group). It also mean working with your competitors, by sharing information, inorder to detect and prevent fraud by criminal organisations which operate on a national orinternational basis.

2.8.4.1 Subscription Fraud

The most common form of fraud is ‘subscription fraud’, whereby the subscriber gives falsedetails when registering as a customer, never intending to pay. Clearly there has to besome form of customer validation procedure in place when registering new users. Thiswill include external reference checks, for example:

! Electoral rolls for domestic consumers! Company registration checks for incorporated entities! Credit checks for business users.

In addressing leakage through fraud, the provider has to comply with legal constraints,even if the defrauder does not. While it may be allowable to deny a connection to asuspected defrauder, actually cutting off the call in mid-call may not be, depending on thelocal jurisdiction.

2.8.4.2 Premium Rate Service Fraud

The principle of Premium Rate Service (PRS) is that the carrier and the PRS providershare the revenue for all calls to the PRS. This means that the more calls to the PRS, themore revenue for the PRS – and it is the carrier that has to pay, even if the call is itselffraudulent. Hence, if the PRS provider can somehow arrange for a large number of callsto itself, preferably that someone else has liability for, then it is a useful revenue stream –basically, from the carrier.One technique used by the fraudsters was to establish a fraudulent connection, thenidentify businesses with PBX equipment, often using auto-dial PCs. After hours, theywould dial the PBX number, hunt for the ‘back door’ dial tone used for remote diagnosticsand software upgrades, then dial out on that number to the PRS. The hapless businesswas then liable to pay for the calls – on one occasion amounting to over $160,000 in oneweekend – and the fraudsters would claim innocence as they invoiced the carrier.



Fig.16 Example - Premium Rate Call Fraud

Honduras Mexico etc

Autodial PCs

PABXs

PRC Services

2.8.5 File ControlsThe major purpose of process controls is to ensure that all work is accounted for, whetherprocessed correctly and fully, or whether rejected or discarded for some reason. Thesimplest controls are those that count CDRs or billable events, aggregate total minutes ormegabytes and reconcile them within each executable program.What is then required is to check that one program’s output is input to the next program inthe series. This may be made more difficult if adjacent programs are run on differentcycles, for example if this program is run daily and the next in series is run ad-hoc or atperiod-end. Additional controls are then required of numbers and names of filesprocessed.If a data error is found and corrected, then the relevant program has to be re-run. Thecontrols must allow files to be recreated for this purpose, but not for an input file to beprocessed twice in the same run – this would quickly lead to duplicate billing andcustomer complaints.

2.8.6 Process ControlsThere are other effective means to improve revenue collection, mostly operating on thesame principles as Quality Assurance – a series of steps that constantly check what isbeing done back against what was actually intended. This means that every process thatsomehow leads into Billing has to be self-validating while the process is being executed.For example, the Product Development process should involve nearly all departments ofthe company, including Network management, Marketing, IT and Billing, Finance andAccounting – this is in order to ensure all buy in to the new product and set out



implications, costs and development readiness timescales11. If any one party is not asignatory to a new product plan, then there is no assurance that the product will emergeas intended.Additional process controls can be used to determine and monitor the causes of problemsin processing CDRs. The Message Investigation unit – the functional group within Billingthat analyses and corrects faulty or rejected CDRs – should report the incidence of errorsof different types. In this way, further investigation nearer the suspected root cause cantake place – such as within Rating tables, Mediation, or at a particular suspect switch.

11 See PBI Media 2000 Report: Marketing and Billing New Products (for stepby step process plan)



3 Billing Systems and Billing Data

This section is concerned with the main features of IT billing systems, the primarysoftware components and the data sources required for Billing. Technical andarchitectural aspects have been avoided, because presenting the full range of options isbeyond the scope of this book. At the time of writing, there are hundreds of systemvendors offering many times that number of current billing products, for different platforms,capabilities, specialist applications or performance, so this book will deal ingeneralisations.

3.1 System Components

In the larger telecoms operator, it is likely that ‘the billing system’ will comprise severaldiscrete components, often from different vendors - and even different billing systems fordifferent products. In theory, this allows ‘best-of-breed’ system components to beselected and integrated into the whole solution, but it might be equally valid to acquire afully-integrated solution from a single vendor.

Fig.17 Components

NumberManagement

Work Force

CreditManagement

��

��

��

OrderManagement Trouble

Tickets

ServiceActivation

AccountActivation

CDRCollection Mediation Rating Billing Bill

Production

Accounting

Collections

Billing System?

Provisioning

NMS

FraudManagementOther Sources

FulfilmentCustomer Care



The complete billing environment will include the following functionality in its components:! CDR or Event record generation – part of network switch or hub system

capabilities, or as a by-product of other processes (e.g. installation tasks)! CDR file collection – by file transfer from the switches, sometimes performed

by the Mediation system! Mediation – specialist software to filter and reformat different source format

CDRs to a common layout! Rating – guiding CDRs to accounts and calculating the basic charge for each

event! Billing – calculating recurring charges, adding one-time charges or credits,

aggregating event charges and calculating product- or account-leveldiscounts, relevant taxes and invoice totals

! Bill Production –specialist invoice printing or itemisation file media preparationsystems

! Collection – Accounts Receivable systems and late payment follow-upprocedures

! Number Management – control and allocation of CLIs.The overall environment will need to include other major applications that are integratedwith or dependent on billing, such as:

! The Call Centre – the interface between the operator and the customer! Customer Care systems, for enquiries, complaint and problem tracking,

contact history and Order Management! Call management using Automated Call Distribution (ACD) and Computer

Telephony Integration (CTI) systems! Document management and CSR information support! Service Activation to control and manage network access transactions! Fraud management – intelligent mechanisms for fraud detection and alert! Work Flow management systems to deal with process hand-offs between

departments! Work Force Management, for the allocation of engineering resources dealing

with installation and servicing issues! Inventory management, covering the supply and installation of equipment! Change Management and IT implementation management systems – to track

and maintain system configuration information in a dynamic environment.The actual configuration for any one type of enterprise is not pre-ordained, but ispredicated by IT strategy and the systems architecture.



Fig.18 Architecture

Data Warehouse

ACD, CTI etc

Middleware

Call Centre and SOM

Billing

Accounting

Service Activation

Fulfilment

Fault Management

Work forceManagement

The configuration will depend on prevailing business requirements, budget, timetable,special process or pricing needs, vendor competencies and political necessity. Generallythough, all the functions will be needed in one component or another, in one form oranother – and it is up to IT to resolve situations where duplicated functions exist ormissing ones are needed. Selecting the appropriate mix goes right back to understandingthe business strategy and process support requirements for the enterprise.

3.2 Billing Data Sources

In order for the end-to-end billing process to be able to perform correctly, data has to becollected from a number of sources. It is essential the data is accurate, or the resulting billcan be challenged – meaning that the customer can legitimately delay payment until theinaccuracy is resolved.

3.2.1 Customer Account DataIn order to send the customer an invoice, you need to know at least their name and billingaddress, and the customer’s preference for payment method. If any kind of automaticcollection is to be used, such as direct debit or credit card debit, then relevant details arealso needed of their bank (sort code, account name and number) or credit/debit card(provider, card number, expiry date and sometimes a security code or card issue number).With this data, a file can be assembled and sent to the bank or clearing house to arrangethe funds transfer on the appropriate due date.For corporate accounts, a larger data set is needed. This will record the company’sinternal structure including all the different physical addresses or sites where service is tobe delivered, such that itemised bills can be presented in the order that reflects thecustomer’s reporting requirement. As long as the itemisation is presented by CLI orextension suffix, then it is a relatively straightforward matter. However, if the customer



requires sub-totals, for example by Cost Centre, then Billing has to recognise whatconstitutes a Cost Centre from the data in every CDR from that customer. In those caseswhere the Cost Centre is not implied in the CLI, (for example, when a CLI could be sharedby several cost centres), then the customer has to enter the cost centre code, either byan automatic PBX function or on the keypad of the handset, before entering the diallednumber string. He must do this for every call.

Fig.19 Customer Hierarchy

Company Company Company

Group

Northoffice

Southoffice

Centraloffice

Sales MfgMfg Sales Sales

Invoicefor Sales

Invoicefor Mfg

Invoicefor rest

Cannot beInvoiced forsubsidiaries

3.2.2 Product Pricing Reference DataIn order to calculate the price of a call or connection, the billing system must have accessto product description and pricing reference data. This data starts with an entry in aproduct table for every product or service, so the service can be presented clearly on theinvoice. Pricing reference data comprises a number of entries in a price table, one forevery instance of every pricing variation for each product, for each occasion that a newvariant is introduced. It will also show the price for every combination of billing factorvalues (or ranges of values) within each product.

3.2.3 CDR GenerationIn contemporary digital networks, control and routing of calls is managed by relativelyconventional computer systems. These computers are usually high-performance variantPCs running specialist network management software programs that are responsible,among other things, for call set-up, call routing and monitoring. The programs also



generate CDRs for each connection instance or Event, and it is the CDR that is thefundamental source of data for usage-based billing.When a caller starts to make a connection, the switch software assembles the dialledstring of digits and caller information to format a CDR. The Call Detail Record is createdwhen the caller finishes dialling, and is updated while the call is in progress. When thecall ends,(for whatever reason), the CDR is written to a stack of CDRs for completed callsand held awaiting the next step. If the call continues for a significantly long time, then oneor more “in-progress” intermediate CDRs may be written out during the call.The typical CDR will usually include at least the following basic data items:

• Calling line identification (CLI), also known as the ‘A’ number – representing the partythat placed the call

• Called number (or ‘B’ number) – the party receiving the call• Start date, time and end date, time of the call• The type of call (voice, data, fax, operator connected, etc)• Duration of call, usually to the nearest part-second• How the call ended, whether normal (A or B hanging up) or not (service break)• CDR identification number, a unique tag for each record• Routing information• Identification of the switch or hub that generated the CDR.There will be other data items as well, but the above lists the major items most commonlyused for billing.

3.2.4 CDR Stacking and CollectionThe CDR stack grows until one of two events occurs:

! The Network Management System (NMS) sends a polled request to the switchfor the contents of the CDR stack. The data is transferred as a data stream tothe NMS computer, where CDRs are formed into a file. This will be a standardsequential or text format file with simple control totals (number of CDRs,number of minutes or megabytes involved in those calls or connections).These files are held ready for collection for the next stage in the process,Mediation.

! The stack reaches a configured limit, expressed as a number of CDRs or atotal data size. When the space available for stacking CDRs overflows, datastarts to be lost. The switch is unable to save CDRs beyond this capacity, andrarely is configured to save event data on local disk – it is usually too busymanaging calls.

If instructed to do so, the switch software will generate CDRs for any or every event orincident on the network, according to the values set for its configurable parameters.Because the stack of CDRs may include records from this superset of events rather thanthe subset of simple call events, the term System Message Detail Record (SMDR) issometimes used (as well as Event Records) to describe the generic event record at thisstage. The extra records provide a valuable information source regarding intra-networkcall routing, polling incidence, traffic congestion and faults. In this way, the SMDRsbecome a major input to network engineers and management for capacity planning andnetwork problem resolution.



3.2.5 Recurring ChargesFrom the earliest days of telephony, it has been customary to charge customers for theavailability of the service, regardless of whether they actually use it. Initially they werecharged a subscription fee, giving rise to the term ‘subscribers’ rather than ‘customers’.The revenue was required to offset the heavy investment in lines and equipment – andthis fee still applies, though often termed an ‘access fee’ or ‘line rental’. Most customerswill thus be billed a recurring charge, levied on a periodic basis (typically monthly orquarterly) regardless of the nature of the service.

s

Billing is required to look up the charge based on the type of service contracted. This willtend to change only occasionally (e.g. being updated to allow for inflation), so billing willonly have to calculate minor adjustments due to the service starting, changing or endingpart-way through a billing period.

3.2.6 One-Time Charges and CreditsWhere high-capacity voice or high-volume data services are provided, there is usually anequipment component involved in service provision. This might comprise, for example,installing a Private Branch Exchange unit (PBX), a router or other Customer PremisesEquipment (CPE). Depending on pricing policy, the operator may choose to charge forthe work and/or the equipment involved, such as for site surveys, engineering installationand commissioning, or the equipment itself.This situation will give rise to a one-time charge to the customer, meaning that the chargeis not repetitive. Such charges are often calculated manually, external to the billingsystem – unless an internal menu of pre-defined, standard fees or equipment item pricesalready exists for use. Raising the appropriate charge is usually one of the last steps ofthe engineering work scheduling and execution process, although the value of the chargemay have been negotiated during the order management process.



3.3 Mediation

In the average network, there will be a number of switches, and these will have beenacquired over time as the network expanded. Even if they were sourced from the samevendor, it is quite likely that different versions or even different types of switch weresupplied. With each new version, the vendor is also quite likely to have introduced newfunctionality or new facilities for control or management of the network. Hence there is asimilar likelihood that the event records generated by the switch will incorporate differentdata elements – and thus be a new format record.Mediation sits between the network and the rest of the billing system components, toinsulate billing from the impact of changes to CDR formats, and from the need to deal withrecords generated for management of other non-billable network events.

3.3.1 Selection and File ControlsOne of the primary functions of Mediation is to be able to amass and process CDRs froma variety of sources, into a common format suitable for processing by the next step in thebilling chain. CDRs can be generated on the network according to run-time parametersset by the NMS, by all the different types of switch and hub equipment. CDRs can alsorepresent all the different types of call or network transaction that occur, so records will bepresented in a wide range of formats and layouts.The first step in mediation is to validate the file controls for each of the files transferredfrom the NMS. An additional external control is also needed to ensure that all files havebeen transferred. Records that represent billable events are separated out from theothers for further processing. Non-billable event records are usually sent to other systemsfor analysis, and control totals are maintained accordingly.

3.3.2 Validation and Re-formattingThe format of each CDR is examined. Every CDR is checked for completeness andindividual fields are validated to ensure the values fit within the ranges defined for thattype of CDR. Records that have faulty or unrecognisable contents are set aside formanual scrutiny by Message Investigation personnel. If there is any problem, the CDR isrejected for review, correction and resubmission as appropriate. Sometimes the whole fileis rejected, as the safest means of ensuring the data sent to Billing is complete andcorrect.The mediation system takes validated CDRs and standardises the format to meet therequirements of the next steps of billing. This involves both field sequence and dimensionchanges, and often includes translation of contents from the original set to the value rangeset expected in the rest of the billing suite.

3.3.3 Consolidation and Duplication: Mediation RulesThe next stage is to ensure that the number of CDRs handed to billing is correct andconsistent with the number of calls detected. For example, with a very long call there maybe a number of intermediate CDRs generated on the network, but it is in effect only thelast that should be used. Mediation therefore has to discard all the earlier CDRs in theset. Another cause of duplicate CDRs arises when more than one switch generates aCDR for a given connection as it transits the network. Mediation has to recognise theuniqueness of each call and select one CDR for it.Another mediation function occurs with free-call and shared-cost calls. In these cases, itis generally necessary to create a duplicate CDR, one for the caller (charged at zero rateor at the caller’s part of the shared rate) and another for the recipient, the party that is



paying the other share of the call charge, usually with the A and B numbers reversed.Having a duplicate also ensures that both parties will see the call on their invoiceitemisation.It is generally not desirable to send duplicate CDRs to Billing. Apart from the casesdescribed above, it is a fair guess that duplicates mean that some form of error hasoccurred, perhaps from accidentally re-processing a CDR file from a switch. In oldernetworks such as analogue mobiles, a duplicate caller identity could mean that an attemptat fraud had been made with cloned SIM cards. To detect the duplicates, Mediation laysout as many CDRS as it can in the computer’s memory and scans for the key signs ofduplication. Any unexplained cases are selected out for further investigation.The detailed functionality of Mediation is governed by a set of rules that are tailored for theneeds of the enterprise and entered as program parameters to the mediation system.Many of the rules are concerned with record formats and data sources, and how to cross-map data elements from the input CDR to the format needed for billing. Others define, forexample, how to check file controls or dictate how to recognise and process special caseCDRs such as free calls. Maintaining the rule set is an important part of billing accuracy.

3.4 Rating and Pricing

Ordinarily, rating systems are mostly concerned with two primary functions:! Guiding the call to the account responsible! Calculating the undiscounted price of an event.

This has to be performed as quickly and efficiently as possible, noting the generallymassive volumes of data that have to be processed.

3.4.1 Guiding and Account IdentificationHaving conveyed a call across a network connection, it is desirable to know to whichaccount the usage charge should be sent. This can in most cases be worked out from the‘A’ number, by looking up customer service records in the billing or rating database. Thedatabase records the CLI for each customer (for corporate customers, perhaps many CLIsor a range of numbers), cross-referenced to the account to which the calls should becharged. Alternatively, it could be a shared-cost or free call event. In these cases,Mediation and Rating between them have the task of guiding the call charge to the calledparty (free-call) or to both (shared-cost call).For residential customers, knowing the account number is likely to be all that is needed atthis stage. For corporate customers, however, there may be a need to allocate the call toa cost centre or sub-account to reflect their business structure. The CLI or even thecalling extension can be used to determine to which of the customer’s physical sites thecall belongs, allowing the charge to be allocated to that site.With some business customers, it is up to the caller to specify a cost centre for later billanalysis purposes. An extra sequence of numbers is dialled as a dial code prefix for eachcall, before dialling the called number. The prefix is entered using the handset keypad orperhaps automatically by software in a “smart box” or their PBX. This extra data isrecognised by the network switch and is recorded as an extra field in the CDR. The billingsystem then uses the code to allocate the charge within the corporate account.The event may alternatively be related to installation or purchase of equipment, in whichcase the “A number” is meaningless and an actual account number is used (indicated inthe type of event) with a product or service code that may be used to determine the unitprice. Guiding is then given by the account number.



3.4.2 RatingOnce the Event Record is guided, any customer-specific contracts can be retrieved andused in the pricing. This somewhat depends on the design of the software being used – itmay be that “normal” rating is used for simplicity and is subsequently overridden duringthe billing process. A number of rating factors may be parameter to the rating calculation,depending on the type of service and the tariff or price plan being offered.

Fig.20 Rating Voice and Data

etc

Quality, line speed,Error rate, CommittedInformation Rate

Direct dialled,operator connected,reverse charge, etc

Event Class

Megabytes / PacketsDurationVolume

Weekday / WeekendStart / end times,special datesTime

Route, Carrier,Network

Calling and CalledNumbers, RoamingGeography

The primary drivers for rating are found in the CDR or event record data. These arefactors used to search against entries in rating tables of prices for each type of service orproduct to find a match. The various rating factors determine which price is used in theset of circumstances defined by those factors. For example, if a call is started at a certaintime of day, then that start time will fit into a time charge band (e.g. peak or off-peak),thereby dictating the rate to use for the call.The key data for rating tables will generally include the following elements:

! Service type! Service instance *! Distance charge band *! Time of Day band *! Unit charge rate (currency)! Unit charge measure (e.g. 0.1 seconds, 10.0 kbytes)! Connection charge or call set-up fee



! Minimum charge! Maximum charge! Date and time that this rate is effective from! Date and time that this rate is effective to.

The fields marked with and asterisk (*) include values that need to be extracted from othertables for each event record. For example, the Distance charge band may be derivedfrom the two exchange codes of the calling and called numbers; using the values fromthe CDR, the exchange pair is found in a table of valid pairs giving the resulting distanceband prevailing on the date and time on which the call was started.Once guided and priced, the event records are filed for processing at the end of the billingcycle for that account.

3.4.2.1 Data

Data calls are classified differently because the profile of a data call is different to a voicecall, featuring contiguous high-rate transfers in either direction, interrupted occasionally. Ifdata were transmitted by voice, it would be analogous to a person yelling continuouslywithout pause until they ran out of breath, possibly immediately followed by another yellingin the other direction. Usually, data calls are set up for connections between computersystems, and hence may be of varying duration from momentary to semi-permanent.High-performance data circuits use different equipment and connection protocols, hencethis cost element is taken into account when determining the pricing formula.What matters for charging purposes is the amount of data transferred across theconnection (measured in kilobytes or megabytes) as well as (or instead of) the duration.Other factors include the transfer rate (faster is more expensive) and quality of service interms of the likely or actual error rate during transmission (perhaps taking error detectionand correction facilities into account).For data calls, the CDRs generated therefore have to supply the extra details:

! Amount of data transferred! Transfer rate or speed! Quality of connection

Because connections can extend over long periods, intermediate CDRs are usuallygenerated (e.g. every ten minutes) – particularly useful if the connection breaks at somepoint so that the customer can at least be charged for the usage up to the nearestintermediate point. On the other hand, even if the call terminates normally, the customerwill expect to be charged once for the whole call, so the billing process will need toaggregate the interim CDRs into a single billable event.

3.4.2.2 Other Usage Events

In this category are all events that might not be classified as calls or data connections, butare potentially billable, and potentially at different rates to normal connections. Theseevents include: Call Forwarding; Recording or retrieving a voicemail message; Sending afax; Calling the helpline; Directory Enquiries. In many cases, the provider may choose tobill at normal connection rates, or at premium rates (perhaps for added-value servicessuch as helpline calls), or they may choose not to bill for these events. Unless theseevents are priced before being sent to Billing, there needs to be a corresponding entry foreach type of event in the pricing table showing the unit rate.



3.4.2.3 Applying Rating Factors

In a simple example, assume the call charge to a conventional retail customer dependedon the following factors:

! Distance called! Time of day at start of call! Duration of call (minutes and seconds)

The CDR would need to hold all the data values for these factors for each individual eventinstance – unless default values were taken for any missing factors. To determine the unitrate, Billing has to match all the corresponding values in the pricing reference table.Charging for distance implies that the two exchanges involved (of the A and B parties) arerecognised to determine a distance charge band. Billing would first determine the chargeband by looking up a table of exchange pairs to match those involved in the call. If thetwo exchanges are the same, then it is priced as a local call, otherwise the matching entrygives the charge band. Then using that value and the other two factors, Billing examinesthe pricing reference table for that product and charge band, for the time of day factor(less than or equal to call start time) and then multiplies the given corresponding rate persecond by the call duration. A very simple example of Rating is presented in the diagram.

Fig.21 Simplest Rating Example

From CLI # / To CLI # / Start time / Number of minutes

From A / To B / 15:30:27 / 15:02.09

From A / To B / 18:53:02 / 15:02.09

Call #1

Call #2

Plus : Pricing variations for (e.g.) Originating Exchange; Terminating Operator;Type of service; Day of week; Special dates; Customer attributes; contractprices, Freefone / Premium Rate calls etc.

From Axx / To Bxx / 15:30:27 / 15:02.09

Exch A to Exch B / Before 17:00:00 / @ 0.010 per sec

Exch A to Exch B / After 17:00:00 / @ 0.002 per sec

From Axx / To Dxx / 18:53:02 / 15:02.09

From the Rating tables:

Exch A to Exch D / Before 17:00:00 / @ 0.025 per sec

Exch A to Exch D / After 17:00:00 / @ 0.009 per sec

Price 9.021

Price 8.119



3.4.2.4 Rating Table Dimensions

If in the preceding simple example there were only 6 distance price bands, 4 time of daybands and only one product, there would be 6x4x1 = 24 entries in the rating table. Thishas to be examined for rating every CDR. There would also need to be the distancecharge band table holding all valid exchange pairs (perhaps several hundred pairs) andthe band corresponding to each pair (one of the 6 in this example).This situation would continue until a price increase was announced, when the price tablesize would need to double, depending on the number of new factor values concerned.Holding two sets of data allows billing to overlap the processing of existing CDRs againstthe old values with the need to set up the new data ready for use in time. It would alsoallow Billing to process CDRs against the correct pricing set applying at the time of thecall, not at the time of processing.As additional factors become involved, then clearly the number of entries in the referencedata table increases dramatically – each time extended by the number of values (or valueranges) of the next new factor. Hence, considering in practice a likely range of productsand services, the corresponding variables and value combinations, maintaining the tablewith a fully correct set of values becomes a continuous and demanding task.

3.4.2.5 Split Rating

In some cases, calls will span the start of a new time band, which leaves the customeropen to being under-or over-charged, depending on the time. In some cases, shrewdcustomers would place a call just before peak time started, keeping it open during the dayto reduce costs. So to correct this anomaly an operator would specify split-rate chargingfor calls, whereby a call starting 10 seconds before peak time would be charged for 10seconds at the low rate and the rest at peak rate. If the operator applies split-rate billingto eliminate such discrepancies, then in effect that part of the calculation has to beperformed twice (or more), once for each band, with the resulting call charge being thesum of the parts.

3.4.3 Rating DiscountsIncreasingly, the computer intelligence to calculate per-CDR discounts is moving awayfrom the billing engine and closer to the network. This means that rating systems oftenneed to be able to access or hold more customer data than the CLI numbers, so thataccumulated usage totals per CLI or per product per CLI can be maintained for discountpurposes. This allows the correct charge per event to be passed to billing – or to a “HotBilling” output (discussed later) and for ‘excess’ use to be passed to the Fraudmanagement system for evaluation.

3.4.4 Pre-Paid Service RatingThere are several different types of pre-paid service, but the principle is that the customerpays in advance for a given amount of usage. While the call is being set up, the systemhas to determine if there remains sufficient credit to allow a minimum connection time,depending on the distance and time of day (or other factors) involved. The ‘system’ canbe anything from a call-box card reader – working on much the same principle as withsimple coin operation: pay first, flat rate per distance regardless of time of day, cut-off onexpiry of credit.A pre-paid network service can also be based on an advance credit to a normal post-paidaccount (as when a deposit is paid before the service may be used), or with pre-paidmobile services, when a value-holding card is purchased at a retail outlet. In either casethe system has to check the credit available – either from the card or from an accountingdatabase for a given account before connecting the call. Rating has to decrement the



available credit at a rate given by the normal prevailing rating factors, and this is usuallyperformed in the switch software rather than as for normal post-paid services, post-call ina separate system component.

3.4.5 Regulatory IssuesThe prevailing regulatory rules depend totally on the jurisdiction in which the call is made.The idea of regulation is to ensure a level playing field for competition, to ensure theincumbent is not able to prevent fair competition. The rate per call for a given distancemay be set by the Government Regulator for the country concerned, or it may not.Mostly, charges are set in outline and then varied by competition, hence each operator willcharge the same for terminating calls but competitively for transit.In one country, no regulatory rules were set regarding connection charges to theincumbent operator’s network from pay phones. The incumbent was able to set aninterconnect charge to a competitor at the amount collected per call; the result wassomewhat predictable – the competitor had to withdraw from the market.

3.5 Billing and Invoicing Operations

3.5.1 ControlsAny financial system has to have controls, to ensure that all transactions are recorded andauditable. So, the typical controls include the following:

! For each CDR-generating switch in the network, the following totals should bereconciled to the corresponding numbers processed in each step of the billingprocess, usually, per day):o The number of CDR files sent from each switcho The number of CDRs held in each fileo The total number of minutes of usage held in the CDRs in each fileo The total value of rated CDRs in each file (this may arise from CDRs

generated by other operators, or from pre-paid services where a value iscomputed by the switch)

! The total value of revenue in invoices raised, by product or service, per billingcycle, compared to the total sent to the bank for automatic remittancecollection (direct debit) plus that sent by other means (electronic or post)

! The total undiscounted value of calls rated, compared to the total processed inthe billing system.

These totals give a measure of the extent to which CDRs are flowing through the system,but they must be synchronised to be useful operationally.Generally a significant number of CDRs cannot be successfully processed. The causesare many, such as: corrupt or incorrect data; file inconsistencies (where file control totalsdo not match file contents); CDRs which cannot be billed (guiding number not found,perhaps fraud or where a new customer is not yet set up in the billing database); norating table data for this type of product or service; and other causes.The controls should therefore highlight where losses are detected. Mediation will routinelyalter the total number of processable CDRs, for example: by consolidating interim orpartial CDRs into one; by generating additional CDRs (for free-call or shared rateservices, to notify both the A and B parties of their share of the call charge); by discardingCDRS according to business rules (such as zero-duration calls). Hence in comparing



control totals from different system components, it is important for operations staff to beable to reconcile like numbers.

3.5.2 Billing CyclesOne of the challenges facing billing operations is to level out the workload across themonth. One way to achieve this is to assign a billing cycle to each customer account,whereby their invoice is raised when that cycle is processed. Enough cycles need to beset up to offer flexibility to the operations staff, so they can allocate billing cycles toprocessing days within a day or two of the preferred invoice date.Corporate customers tend to require their invoices to cover events up to the end of amonth, so the majority of CDR data needs to be processed at month-end. Residential andsmaller business customers tend not to be as concerned about the invoice date, so theycan be processed when more convenient.

3.5.3 Bill ProductionAfter the billing run, invoices are ready for the final stages of production. In the past, billproduction implied a hefty print run, so large it would often be outsourced to a specialistprinting company with high capacity equipment. Larger customers then requested that thedetail of itemised calls and call charges should be sent on magnetic media (floppy disk orCD-ROM), with only the invoice summary sent on paper.At this stage of the process, it is necessary to record the invoice details in the accountsreceivable system, for later collection from the customer.Use of paper as the invoice medium remains a legal requirement in many countries.Increasingly, however, customers are requesting their bills to be sent electronically by e-mail or using other facilities collectively known as Electronic Bill Presentment andPayment (EBPP)12. This offers flexibility to the customer for call charge analysis (maybeby call centre, extension or location) or for abuse detection (out-of-hours calls,international or premium rate calls, etc). Furthermore, sending a file rather than paperreduces environmental impact as well as bill production costs to the operator.Extending the principle further, many operators and service providers are moving the CDRdetail to a secure internet web site for each customer to view and download as they wish(incidentally, sometimes incurring a call charge in the process). This also permits theprovider to offer CDR analysis tools as part of the service - a valuable aid for the customerin managing use of their telephony services.

3.6 Retail Billing

3.6.1 Aggregation and the Bill PoolThe first task is to select which accounts are to be billed at this time. By selection of abilling cycle for each account, it makes it straightforward for Billing Operations to choosethe cycle, knowing the overall workload profile associated with that cycle. The set ofbillable CDRs that are ready for invoicing are collectively held in what is often called the‘bill pool’. The bill pool contains all rated CDRs that are as yet unbilled, but may not allrelate to the current period – usually if they were delayed into billing for some reason in anearlier period.

12 See: PBI Media 2001 Report, EBPP – The Market Opportunity; also EBPPvendor profiles



For each account in the selected bill cycle, it is necessary to sort and total up all the ratedCDRs, initially by product or service package within each customer account. This sortorder to some extent depends on whether the pricing formula contracted with thatcustomer includes a discount (see next section), or if the customer has a hierarchicaccount structure. Then it is necessary for the sort sequence to include product group,cost centre or sub-account levels as necessary. Aggregating usage in this way allows theperiod discount by product to be computed.Having assembled all the aggregation discounts for the account, the invoice contents canbe calculated, including tax (VAT, GST etc) if applicable.If itemisation is required, then it may be necessary to rearrange the CDRs in the correctsequence for presentation. Generally, this will be in date/time order by product or servicewithin service identifier (CLI), but clearly the customer may be offered an option to havethe charges grouped according to some other sequence.

3.6.2 Billing DiscountsThanks to the pressures caused by fierce competition in the telecoms market, the range ofdiscounts and other incentive schemes being offered to customers are many and varied.In essence they fall into the three main types discussed below in this section, but theimagination of marketing and product management will produce others possibly unrelatedto total usage, here raised as a fourth type.

Fig.22 Discount Schemes

100%

3%

6%

9%

Discountrate

Usagelevel

Tiereddiscount

Tapered discount(applies to all

usage)

“Freeminutes”

(etc)



3.6.2.1 Tiered Discounts

This is the first basic type of discount, whereby the more the customer uses the service inthe billing period, the higher the level of discount he receives. Thus for a minimum level ofusage, the first tier, the customer might receive no discount at all (zero percent), then asusage passes the first threshold, usage thereafter is subject to (in this example) threepercent, then six, and so on. The important distinction is that the discount applies not tothe total but to usage after that point, up to the next tier threshold.

3.6.2.2 Tapered Discounts

This is a variation on tiered discounts, whereby as a threshold is reached, the level ofdiscount entitlement reached will apply to all usage for the period. This is more generousto the customer than a tiered discount.

3.6.2.3 Free Usage

Most mobile phone users will be familiar with this type of discount, whereby a number of“free” minutes are allowed per period, depending on the price plan. What it amounts to isa tiered discount with the first tier set at 100% discount. After the threshold number offree minutes is used up, the discount is zero thereafter. Note that reaching the maximumnumber of free minutes may occur in the middle of a call, so the billing system must beable to split the discount across the threshold.

3.6.2.4 ‘Friends and Family’

The ‘Friends and Family’ discount was a notoriously successful discount when it was firstoffered in the USA by MCI to their customers, to the extent it is now offered by mostoperators in return for either a small recurring charge or free for setting up the facility.Most fixed line customers will be familiar with the concept, whereby calls to a list ofperhaps five or ten customer-specified numbers would be rated at a heavy discount,regardless of when the call was made. The billing system had to be able to store the listof specified numbers for each authorised CLI, and recognise CDRs for calls made tothose numbers. The CDRs are then either grouped as a special call type to show thediscount, or rated at the special price, depending on the billing system implementation.The other significance of this discount for Billing was that MCI’s main competitors couldnot support the Friends and Family scheme in their billing systems. Consequently, MCI’soffer remained unique (and hugely successful in attracting new customers) for severalmonths while competitors’ IT billing systems were frantically updated to match the facility.This is another illustration of how essential Billing can be in countering competition.

3.6.2.5 Other Discounts

Marketing will create many special offers in order to entice new customers or to stimulateadditional usage. There are much heavier loads on a typical network during the businessday, so it has long been customary for operators to encourage non-essential traffic to bemade during quieter periods. This was achieved simply by offering a much cheaper rateper minute for evenings and weekends – this additional usage is particularly valuable tothe carrier in off-peak periods when the network is by definition not busy. At those times,all additional revenue generated will be of benefit, assuming the costs of promoting thespecial offer are covered – the cost of transmission and servicing of extra calls is verysmall compared to the revenue.Such discount offers are often not presented as ‘discounts’ in the sense of a visible creditagainst the normal price. More often the calls require special prices, naturally much lowerthan peak rates, to apply over the defined routes or on the days or at the times quoted inthe offer (an example of this could be an offer of: all calls to Australia half price onChristmas Day). What this means for Billing is that the rating of call CDRs related to the



offer has to be performed to the exception rather than to the rule of normal business, sothe rating system component has to be more flexible than otherwise.

3.6.3 Bill Formats and MessagesPart of the competitive appeal of one operator against another can be the presentationand appearance of the bill. Choice of style, format and design can attract different marketsectors, while different payment options and levels of detail can attract others.One means of communicating with a particular customer group is the addition of amarketing message targeted at that group. The definition of “group” can vary from billcycle to cycle – so that the message can vary from a simple seasonal greeting to targetedpublicity to promote an upgrade offer for services used in that customer group. Choice ofthe customer grouping and the corresponding ‘message of the day’ to present on the billcan become a powerful marketing tool.

3.6.4 Billing as the DifferentiatorInformation presented with the invoice can be a major factor in attracting and retainingcustomers. If a residential or small business customer, for example, has several lines(and thus several CLIs), it can be very useful to be presented with a single bill for allservices regardless of the CLI from which it was made. A larger business may prefer tohave calls itemised by cost centre or to have the invoice divided over several accounts.

3.7 Wholesale and Interconnect Billing System

The system components used to process Wholesale and Interconnect billing are oftenshared, since there is enough similarity in processing requirements. They will generallynot be the same as those used for retail billing, because:

! The CDR data set that has to be processed includes CDRs that are not billedto retail customers

! Often zero-duration calls will be included, to account for the call set-up costcomponent that is not generally billed for retail

! The rating algorithms require a data structure based on routing as well ascountry pairs or remote network and exchange pairs, as well as on factorsagreed in the individual contract

! We need to calculate amounts due for invoicing inwards and transit calls, andfor reconciliation for outwards calls against the other operator’s interconnectinvoice

! Wholesale bills may need to incorporate interconnect cost elements! Internal accounting and reporting requirements reflect the bulk nature of

wholesale and interconnect traffic! Statements more often summarise traffic by route! CDR volumes are very much larger per account than for retail customers.

3.7.1 InterconnectInterconnect billing is concerned with calculating the amounts due to be paid to andreceived from each of the network operators that our enterprise connects with. The CDRfor interconnecting calls holds the routing in the form of a chain of codes representing theidentifiers of each of the network operators involved. So, to calculate the amount due



from or to each operator, we use all those CDRs which have an interconnect element tothe call (i.e. originating or terminating on another network).Note that the set of interconnect CDRs will include:

! CDRs that are billable to our retail customers – but not all of the retail CDRs,since many calls will remain on our network

! CDRs that are billable to our Wholesale customers – but not all of theWholesale CDRs, since it depends on how the wholesaler connects to orwithin our network

! CDRs that are only billable for interconnect – such as transit or incomingterminating calls.

3.7.1.1 Reconciliation Estimates

Unfortunately, we do not always know the full sequence involved in the interconnectrouting. This is because our interconnect neighbours (or others further down the route)will sometimes mask out the routing data for commercial reasons. In those cases, we canonly estimate call costs based on country pairs or network and exchange pairs rather thanon actual routings used. Reconciliation is then based on matching the total minutes andtotal numbers of calls against the incoming invoice, together with a fair comparison of theamount invoiced against our estimates. It is of course important to synchronise theperiods being reconciled.

3.7.1.2 Interconnect - Incoming and Transit

The CDRs we use for incoming or transit calls will be generated from our network node atthe point of interconnection with the adjacent operator. We do not use these CDRs forretail billing – simply because the caller is not our customer – but we do need to add theseCDRs to the set to be processed for reconciliation of incoming interconnect invoices.

3.7.1.3 Interconnect - Outgoing

The source data for outgoing interconnect usage is the same set of CDRs used for retailbilling, together with the set of CDRs for outgoing side of transit calls. The rating factorsare different to retail. The system will examine the code for the adjacent network operator(to whom the call was passed) and determine the settlement method, the rate for thedistance concerned and any other rating factors. We may or may not know the entireroute involved. Billing aggregates the rated CDRs by operator and settlement method forthe route or destination concerned to await reconciliation against the operator’s invoice.

3.7.2 WholesaleFor wholesale billing, we have to identify which CDRs belong to the wholesaler. We mayonly need to process CDRs from a specific set of switches, according to the wholesaler’snetwork model. In other cases we may have to recognise the A number as being awholesaler’s pre-selecting customer or even that the B number has a prefix of thewholesaler’s point of presence.CDRs for the wholesaler’s customers must not be processed by our retail billing. TheCDRs will nonetheless be processed for wholesale billing purposes, to calculate theamount due from the wholesaler for use of our network. We may need to pass the CDRsto the wholesaler for them to be able to perform their retail billing function, depending onthe agreement.



3.8 Accounting and Collections

If the objective of the business is to generate profits, then the objective of billing is togenerate complete and accurate invoices. The tracking of amounts due and received, theactual collection of money, of revenues due to the business, are the next steps in theoverall process.

Fig. 23 The Collection Process

Call &Discuss

Suspend Service

Service Management

Suspend Account

Send Bill

Send Reminder

Legal Action

Fraud Management

Remittance Processing

3.8.1 Accounts Receivable and Remittance ProcessingThe billing system will have notified the Accounts Receivable system of details of eachinvoice raised. On the appropriate due date, for those customers who have authorised it,a direct debit or credit card transaction will be sent to the financial institution concerned.Otherwise we have to wait until the customer pays the account by some other means,usually cheque or a bank transfer (initiated by the customer).If the customer pays by cheque, we have to have facilities to receive and process thecheques. The process is quite cumbersome – opening the post, batching and validatingthe papers, allocating the payments to the account concerned, sending the cheques to thebank, etc. While smart paper-handling systems can alleviate the task, it is becoming anincreasingly more expensive option and thus less attractive for the business, and is oftenoutsourced to the bank (using a ‘Lockbox’ facility). In this case, we have to wait for thebank to notify us what has actually been received.The business may offer residential accounts to be paid by cash or cheque into a bank orpost office. In this case again we have to wait until we are notified by the bank thatpayment was made in this way, specifying the account numbers and amounts concerned.



3.8.2 ExceptionsEvery remittance handling process has to allow for exceptions, for example: chequesdishonoured, accounts closed, under- or over-payments. The business cannot really besure the account is paid until the time for processing and clearing the payments haspassed, unless some sort of pre-authorisation is used (e.g. credit card remittances) or bypre-payment (as in pre-paid mobile services).

3.8.3 “The Cheque Is In The Post”After 30 days from invoice date, the business should have received a remittance from thecustomer. A simple trawl through the ledger will highlight who has not paid, so theCollections process moves to the next stage. Generally, the first step is to send areminder notification, but increasingly – partly because of risk of fraud – businesses arelooking to more prompt ways to encourage the late payers. These include sending anemail message, or for mobile services, an SMS text message reminder is sometimesused. Either way, we again have to wait for the customer to pay.

3.8.4 Bad DebtsAt some stage after the reminder has gone out, the business has to decide that thecustomer is unable or unwilling to pay. Provided there has been no dispute about theinvoice, we have to trigger recovery action that will become progressively more firm. Onetechnique is to restrict the customer from making long-distance, international or premium-rate calls. Another involves altering the service parameters on the network so thatoutgoing calls are redirected to our call centre to insert a discussion with the customerregarding non-payment.Many companies rapidly reach a point whereby the customer’s service is suspendedaltogether, and the debt passed to a specialist debt recovery service, usually outsourced.After all, different persuasion techniques are needed to the gentler and more courteouscustomer care services the business normally provides to regular customers. In anyevent, details of the customer should be recorded for subscription fraud analysis and toavoid offering the same customer any service in future, except perhaps on a pre-paidbasis.

3.8.5 Pre-Paid ServicesOne obvious solution to minimising bad debt is to bill the customer in advance. For fixedline services, this often amounts to no more than requesting a customer deposit orpayment in advance. This is a simple way of managing the risk, allowing usage up to thatamount and sometimes beyond. When the deposit is used up, monitored typically on adaily basis, the customer could be advised and perhaps the service restricted until thenext billing cycle or the next deposit is received.For mobile services, the potential fallibility of the retail customer and high equipment costsrequires a more rigorous solution. If pre-payment works for pay-phones, why not formobile? The concept requires changes in the handset, the switch and the billing system.The first part was to link the stored value on a pre-paid card – bought through any one ofa number of different retail outlets – to the handset and thence to the control software inthe network. The next part required the switch to recognise the remaining credit on thecard, to rate the call in real-time, to record remaining credit and to cut off the call whencredit was exhausted. The third part required billing to ignore CDRs for pre-paid events –but include them in the set for traffic analysis and capacity planning.Use of pre-paid services remains the biggest growth area in telecoms. It providesanonymity to the customer, no need for any contract or bill shock at month-end. It also



helps the customer to maintain tight budgetary control – particularly useful for students.To offset the handset costs, unit call prices are very high, so the provider benefits.

3.8.6 General LedgerThis is the repository for summaries of all financial transactions. As such, it will receivedetails of billings, analysed by product type or customer type or whatever the ChiefAccountant requires. It will also receive details of remittances and bed-debt write-offs,usually with a systems interface from Accounts Receivable. It is probably not the bestsource of up-to-the-minute information about sales, cancellations, fraud levels and trafficpatterns, but is a valuable source to review costs and historical revenues.



4 Other Systems That Interact With Billing

4.1 Customer Care and the Call Centre

From time to time, the customer will want to contact your company. In many cases, theCall Centre (or Contact Centre) is the only medium used by the customer forcommunication with the company. Customers will wish to make contact whenever theywant:

! To make an enquiry about a service! To register a complaint about poor service quality or service interruption! To place an order for a new service! To upgrade existing products! To change the parameters of an existing service, such as call forwarding, call

barring or exchange barring! To enquire about recent bills or account status! To notify changes such as a new address or new bank details! To compare your product pricing against a competitor’s.

The normal practice of giving support to a reasonably large number of customers isthrough a Call Centre, offering immediate response and a single point of contact.Customer Service Representatives (CSRs), or Agents, react to customer requirementswith the help of on-line information, recording contact details and the nature of therequirement for further action if necessary.The process must attempt to resolve the customer’s question to the best result possible,in one single contact. This is not always possible, for example if there is a need to repairnetwork fault or replace equipment. The CSR should answer the customer’s questions,attempt to complete the necessary action him/herself, or at least initiate corrective actionby others that will resolve the problem – and be confident that the back-up process willensure that action is taken.

4.1.1 Billing and Accounts EnquiriesHaving identified the customer, the CSR must be able to respond to the most commonbilling enquiries. These include requests for:

! Account status and amount outstanding! Explanation of, or rejection of, one or more call charges on the detailed call

itemisation statement! Payment history details! Temporary alternative payment arrangements.

A number of issues are important, the first being security. It is imperative that the CSRestablishes that the caller is bona fide, otherwise there is a risk of confidential accountdetails being divulged. The CSR must also have adequate enquiry mechanisms to allowquick identification of the customer (for example from their CLI, account number, name orpostcode), and then have immediate access to the security code or PIN to minimise therisk of unauthorised access.



4.1.2 Order ManagementWith the support of an Order Management system, the CSR can capture details of a newcustomer order, triggering the process steps to deliver the product or to commissionservice access. Ideally, the CSR support systems are integrated to the extent that detailsof the customer order are sent automatically to the various other system componentsdealing with fulfilment, service activation, billing and engineering installation, asnecessary.Ideally, your order completion time should be sufficiently short that there is little need toallow for anything other than new orders or service cancellations. However, it isreasonable to expect the customer to change their order before delivery and activation iscomplete, so your process should specify the rules as to what changes are allowedwithout charge, or what charge should apply. The rules may get complex for productbundles and packages, but the process for dealing with various types of change (withinreason) should be thought through when the product is being designed – or at least,before the CSR encounters the situation in practice.In many cases, service cancellation within a specified time will incur a penalty for thecustomer, to offset the cost of sale, lost business or installation costs. Whatever charge isactually levied must be forwarded by some means to Billing to include it on the nextinvoice.

4.1.3 Contact HistoryThis is all about establishing a good relationship with the customer. Every time a contactis made it should be recorded so that the CSR has a clear picture of the history of eventsfrom the customer’s point of view. Every order, invoice or payment should be recordedalong with every outgoing marketing call, advertising promotion, brochure, every incomingcall, enquiry and in particular, every complaint – and who dealt with it, what was theoutcome.This not only allows the CSR to know the sequence of events but also to assess the likelydegree of customer satisfaction with our service – perhaps indicating how likely thecustomer is to churn to another provider or to upgrade their existing portfolio of ourservices.The contact history additionally helps to monitor how CSR time is spent in the call centre,individually and collectively. It can also provide a possible indication of how competentindividual CSRs are at dealing with customer problems.In order to keep the history viable, every contact must be recorded by the CSR (or by therelevant computer program for mailings). This has to be achieved as a matter of routineand as consistently as possible, with the CSR diagnosing the reason for an incoming call– and recording different aspects of the contact if it progresses from one thing to another.It is quite reasonable for a complaint call to end up with the customer accepting theresolution and ordering a new service.



4.1.4 Complaints and Fault Management

There are three reasons for recording faults reported by customers:! To ensure every one is followed up, resolved wherever possible and closed! To respect the customer for having taken the time and trouble to report it! To be able to analyse problems statistically for trends or incident recurrence,

to identify faulty equipment or softwareThe customer will want to be reassured that a fault or problem will be addressed andresolved with minimum delay and inconvenience to him. From a billing point of view, it iscustomary to grant some form of allowance or credit to offset the problem, assuming thecustomer has in fact been inconvenienced. A record of the amount credited, the date andreason must be passed to billing to appear on the next invoice – or on a separate creditnote on the next billing cycle.Depending on the size and degree of the problem, empowering CSRs to give a credit to aresidential customer should be acceptable. On the other hand, a corporate customer mayhave negotiated a service level agreement with you, and will expect the terms of thatagreement to be complied with – including penalties for non-compliance.

4.1.5 Problem ResolutionOperations management needs to review reported problems periodically to identifycommon or recurring features or trends. Problem analysis may point to networkequipment failures, intermittent service problems, software errors or poor informationdesign. Hence the CSR should be instructed to categorise and record problems in a formthat can be analysed later.It is useful to categorise first according to the source of error details provided by thecustomer and then according to the actual or suspected cause. A customer might report“my phone doesn’t work”, a problem later diagnosed as a faulty handset or battery,misuse of handset keys, network congestion, poor reception, faulty network equipment, oreven that his service had been suspended due to non-payment of his account.



The information from this analysis will give long-term benefits: being able to detect andrepair faults more efficiently; having an instruction manual rewritten more clearly (and inthe customer’s preferred language); or, selecting a more reliable equipment supplierwhen the contract is due for re-negotiation. Another outcome may be a need to redesignthe bill and the information presentation, if that is a frequent cause of customer questions.In the event of a service fault or billing error, it is wise to empower the CSR to offeraccount credits in recognition of the inconvenience suffered by the customer. This meansthat the CSR has to have an interface with Billing to record the details for inclusion on thenext bill. On resolution of a major problem, the reporting customer might be notified of theoutcome – your prompt (and courteous) response could stop them taking their business toyour competitor, so be grateful they informed you in time.

4.1.6 Customer ChangesIt is important that the database holds the most up-to-date information about thecustomer, including mailing information, site locations, and bank or payment details. Sowhen the customer contacts the company it may provide an opportunity to ensure thedetails on file are correct.However, there is a security aspect to consider – it is not appropriate to change detailswithout being quite sure that we have the actual customer on the phone. It could beconsidered embarrassing, an invasion of privacy, or even a security breach to send forexample the customer’s invoice details to another party. Maybe there are calls itemisedwith the invoice that should not be revealed. For that reason, some kind of password orsecurity code should be agreed with the authorised customer representative early in theprocess.

4.2 Call Centre Systems

In order to maintain operating efficiency, Call Centre systems have to be effective inmanaging call traffic. This involves allocation of work, database information retrieval andupdates, and presentation of information to the CSR. Thus the CSRs provide service on amulti-server queue basis, theoretically minimising the time a caller is kept waiting.Although the smaller call centre will operate very successfully with simple Customer Caresystems, the larger contact centre will find economies of scale from use of sophisticatedcall traffic management systems including

! Automated Call Distribution (ACD) – allocates an inbound call to the nextavailable CSR; also allocates outbound calls to suitably-qualified CSRs whentraffic volumes permit

! Computer Telephony Integration (CTI) – recognises an incoming CLI andwhere possible retrieves customer details for the CSR before connecting thecall; also retrieves customer history for outbound call campaigns

! Interactive Voice Response (IVR) – conducts an automated dialogue withincoming callers to pre-filter types of call to the most appropriate group ofCSRs or deal with enquiries automatically through voice recording.

In general, these mechanisms will not directly interface with billing data as such. The IVRcould in theory access invoice details or account balances to present an automatedresponse to simple enquiries, but this is not normally a cost-effective approach. Thecustomer database (or a copy) is used by CTI systems to retrieve customer names andservice details, and by ACD systems for outbound campaigns. The link to Billing data ismore tenuous – unless Billing is the source of a list of candidate customers for thecampaign.



4.3 Product Management

The ideal product management process starts with someone in the enterprise having abright idea, and reaches a climax when the product is launched and used for the first timeby a customer. At that point, it is necessary for Billing to be ready to invoice customers forthe supply and use of that product, at the published or contracted tariffs.

Fig.24 Product Management Process

Consult Operations

ConsultFinance

IT SystemChanges

Consult ITDepartment

ProductDesign

Consult Marketing

ImplementRollout

Concept NetworksCustomer CareBillingBill ProductionPublicityFulfilmentTraining

Unofficial processshortcut ??

Iterate withmodified design?

Review

MonitorPerformance

There are several stages to the product management process:

1. ConceptSomeone has a bright idea for a new product, maybe even a competitor. Thegeneral shape of the product or service is formed with an idea of the targetmarkets.

2. Market researchA certain amount of intuitive and carefully detailed research has to be conducted toevaluate the likely number of customers, the potential revenues and product imagethat will be attractive.

! Prepare business case



Based on the background research, the business case can be preparedand presented to management. The investment cost in terms ofadvertising and promotion, the internal infrastructure needed for productdelivery, training and fulfilment is estimated together with assessed ITsystems impact costs. The anticipated revenue spread over the caseperiod sets the scene.

3. Design Product! Specify product content, bundling, delivery and pricing

A more precise assessment is made of the public face of the product, interms of pricing and discount schemes, launch timetable, product content(new or existing features), marketing incentives at launch and so on. Adetailed statement of capital investment or infrastructure changesnecessary to support the product has to be prepared.

4. Consultation cycle:

o MarketingGiven the product design, does Marketing agree that the product shouldbe launched as designed? Is there time to prepare the TV and mediaadvertising campaign before launch?

o OperationsDoes Operations have the capacity to support the new product, in termsof Call Centre agents, systems performance and estimated processtimings?

o Customer CareIs the Call Centre prepared to take on the extra product load in terms ofstaff training, information for customer enquiries, orders for upgrades orenhancements?

o BillingAre the individual programs in the Billing suite able to mediate, rate andguide the charges for the product CDRs? Can Billing operationsaccommodate the reference data load and testing of the new pricingstructure and discount schemes in the lead time given?

o Bill ProductionWill the planned new promotion material fit into the productionequipment? Is there time to arrange the artwork and printing of thebrochures? Can the invoice layout support the addition of this particularproduct, at detailed and summary levels? Can the print vendor arrange tomake the layout change ready and tested in time for launch?

o FulfilmentWhen the publicity material is printed, will it be ready for distribution at theFulfilment house in time? Will there be an adequate supply of the free



alarm clocks that are part of the promotion, ready in time? Is there asuitable packing and postage arrangement with the vendor?

o TrainingDoes the Training Department have enough information to prepareinternal training presentations for all parties involved in the delivery andsupport process (sales representatives, CSRs, engineering, networkoperations, Billing, IT personnel, back-office staff, management)?

o FinanceAre there adequate capital funds and cash flow available to invest in thenew product for the duration of the project for its deployment?

o IT DepartmentAre all necessary changes properly specified and understood? Can thechanges be made and tested in time for Launch? How does the priorityof currently approved changes in the pipeline affect this programme, andvice versa?

5. Review outcome, modify design and iterate the consultation processHaving gained essential input information from the various departments, whetheraffected or not, it is now possible to evaluate whether changes need to be made tothe product design, or to the proposed pricing, content or launch timetable,allowing for those changes?

6. Plan implementation Set out the detailed tasks needed to launch and service the product, and ensurethere are sufficient resources – and that those involved accept and agree theirresponsibilities.

7. Rollout.

This works fairly well in theory. Unfortunately, in the high-pressure telecoms world it isquite normal for the process not to be followed13. All too often, it consists of step 1, someof step 2 and then step 7. Then Operations has to pick up the pieces. Other steps occurlater, ‘on the fly’ – generally after the product has been launched. It has been known thatthe first inkling one call centre had of a new product was when CSRs saw advertisementsfor it on bus shelters while on their way to work! It is equally unfortunate if Billing were notable to invoice customers for the product within a few days of launch or if FraudManagement were unable to prevent encroachments in time.

4.4 Service Activation

Networks with a larger customer base will generally use a system for Service Activation(SA) to sit between the Billing and Customer Care systems and the Network. There maywell be a range of different switches and equipment types, so it is desirable to isolate thecore systems from the complexities of the network, in a similar fashion to Mediation forCDRs.

13 See: PBI Media 2000 Report: Marketing and Billing New Products (for 12step Process Plan)



The SA system will accept business level transactions, usually from Customer Caresources, translating them into network management commands. The typical functionssupported will relate to particular CLIs or groups, and will include:

! Activate or suspend service! Call barring (block/unblock)! Exchange or call prefix barring! Call forwarding! Pre-selection! Activate or suspend functionality (e.g. switch on/off Voicemail).

In a more complex or longer-established network the variety and sequence of commandsto perform particular service activation tasks will become quite complex to manage. Aside issue is the need for the system to respond in an appropriate timeframe for thecommand concerned – for example, it is not always practical to expect the system toactivate a range of new numbers in real time while the network is busy.

4.5 Reporting and Management Information

4.5.1 Operational ReportingReporting is required for a number of worthy reasons. These include:

! Management information regarding orders, revenues and event volumes byproduct and customer type

! Monitoring volumes of work, levels of complaints, faults, compliments, callcentre statistics, usage patterns and distribution by product

! Information to Marketing regarding the success of promoted offers or theeffectiveness of advertising campaigns

! Control totals of CDRs, minutes, megabytes and packets carried, revenuesprocessed and collected for reconciliation elsewhere in the billing process.

4.5.2 Data Warehouses and Data MiningThe potential for reporting is limited only by the resources available and the imagination ofthe recipient. One solution to an apparently endless need for data analysis and reportingis to establish an entirely separate database containing a structured copy of all operationaldata, in a ‘Data Warehouse’ or a series of ‘Data Marts’. This will incorporate data insummary and detail form, about products, customers, CDRs and ERs, revenues and costsin a vehicle designed for high performance reporting and efficient response to on-linequeries.The data selection and analysis process is known as ‘data mining’, because of thepotentially immense value to be gained by the business from information extracted fromthe data. The scope can include:

! Acquisition trends, relative success and profitability of different products! Call traffic volumes and patterns for network capacity planning, special

marketing offers! Geographic analysis of network usage for planning cell expansion and call

access points



! Demographic analysis of customers, revenues, to minimise uncollected debts! Fraud pattern detection! Problem and fault analysis to identify faulty equipment and software! Interconnect cost analysis to negotiate more cost-effective routings.

All this information essentially relies on billing data – rated and priced CDRs, tied to thecustomer classification and type concerned, in addition to the geographic data sourcedfrom network and cell usage from the CDR and postcodes from the customer database.

4.5.3 ChurnLosing (and gaining) customers is called ‘churn’. Churn rates of 20% to 30% and moreare not uncommon, particularly in the mobile market. After years of indifference to thepractice of “customer service”, there is universal acceptance by all operators and serviceproviders of the importance of high-quality customer care. Losing a single customerbecause of poor service may not seem to have a large impact on the bottom line (unless itis a major corporate user) but a succession of losses will.

One measure of the value of a lost customer is the wasted cost of acquisition, another, theestimated revenue lost over the next few years. Take the hypothetical average revenueper customer, multiplied by say only half of the expected churn within all the customersyou plan to have over the next five years, and the result shows how much you stand tolose from churn. Make every effort to retain good customers, and the value of goodservice takes a higher profile. Worse, that lost revenue goes to a competitor. Either way,losing a customer is something that should not be allowed to happen by default.



For this reason, the billing database should be analysed on a regular basis for the signsand symptoms of potential candidates for churn. Together with an analysis of complaintsor payment amounts, there may be pointers to customers who may be unhappy, sooffering alternate price plans may prevent them from churning.



5 Choosing and Implementing a Billing System

5.1 Billing Only, or Something Wider?

One of the first problems to consider is, what exactly is the company looking for? It maybe a facile question, but it does start to ask the set of questions that result in the selectionof an appropriate platform. It goes in a sequence roughly like this:

! Corporate strategy defines the products, customer base, growth targets of thebusiness

! Operational strategy defines how products and services will be supplied andhow customers will be supported

! Process definition states what has to be done to support the business! The strategy and process model sets the background for the Requirements! IT strategy defines the technical environment and architectural constraints, in

which systems supplied from the various vendors will be required to cooperate! The Requirements Definition states what the systems must be capable of, in

terms of functionality, performance, capacity and maintainability, against whichvendors may propose solutions

! Once the systems have been selected, Working Practices (based on theprocess model) can be defined. The Working Practice definition forms thebasis of operations, of user training and hence User Acceptance Testing

! The Acceptance Criteria state the service levels contractually required forcompliance with the Requirements. They provide the basis upon which thecompletion of the implementation project depends, before payment is madeand the solution is considered fit for operational deployment

! The Testing Strategy defines how compliance will be measured.

There are sufficient numbers of software vendors “out there” who would be delighted tosupply, and of course they are competing with each other for your business. Hence it isreasonable to suppose they compete by offering more interesting products, moreattractive prices, or better support. If you do not have a clear statement of requirements,they cannot be held entirely responsible if their solution does not do what you wanted it todo, but you thought that you meant to say so but didn’t14.

14 See: free White Paper 2001: Choosing a Billing System. Email:[email protected]



Fig.25 Principle of the Selection Process

Testing &Results

Strategy

Process

Requirements

Gap Analysis

AcceptanceCriteria

Procurement

5.2 Requirements Definition

Requirements have to be defined in three main areas:! Functional: This covers three main aspects:

o Process, including all specific tasks, pricing and discount calculations,algorithms, data manipulations required in order to support the varioussteps in the business process.

o Data, including entity/relationship models, customer and account datastructures, product and pricing structures, field specifications needed.Include all reference data sets

o Performance, including process timings and volume specifications, growthand capacity requirements.

! Technical: These items specify the IT environment, platform, and anyoperating system, middleware or hardware constraints. Include all softwareinterfaces, architectural requirements, existing system components that thenew system is required to interface with, with precise details.

! Miscellaneous: Requirements for support, training, vendor’s corporatesubstance, escrow, competitive supply considerations – anything you requirethe vendor to comply with (subject perhaps to negotiation)

One of the more important considerations is to present requirements at three levels:Critical, Mandatory and Optional.



! ‘Critical’ means that compliance is an absolute threshold, and non-compliancewill immediately and automatically rule the vendor or product out of furtherconsideration.

! ‘Mandatory’ means you want it, but non-compliance may require customisationor some other acceptable compromise.

! ‘Optional’ means either “nice to have” or “the vendor will get extra browniepoints for offering this feature”.

Set the rules and stick to them – and it helps to know before entering negotiations with avendor whether a requirement really is a Requirement or is an item on a wish-list.

5.3 Buy, Build or Outsource?

One of the selection decisions is whether to Buy, Build or Outsource the software15. Therespective considerations for each are set out below. It helps to understand thecompany’s strategy before making the choice; investment requirements and risks varywidely between these choices.

5.3.1 BuyThis is where the operator buys or licenses a software package, a system from a vendoror software house, for operation in-house. This tends to be the most common billingsolution, offering short implementation time scales and a system that has sometimes beentested and used by other telecom companies – ostensibly a lower risk approach. Thereare, however, several hundred current billing packages that potentially offer a solution toyour billing requirements, so selection can present challenges – and delays while youverify various claims made by the vendor.Having the operation in-house implies a need for you to recruit operational and supportpersonnel, together with taking responsibility for their training, welfare and management.Perhaps you will have to set up an IT department to implement some localcustomisations. It is certainly advisable to have your own testing team to undertakeacceptance testing; don’t let the vendor “mark his own homework”!The Buy investment is potentially lower than for Build, depending on the extent of localcustomisations needed. The vendor should normally amortise the development costsover a number of sales, and you tend to get a higher level of functionality than for in-house developments – more ‘bang for your buck’, as it were.Unless the package is heavily customised (when the approach takes on some aspects ofthe Build option), you will probably end up using a version of the vendor’s software thatwas built some months earlier and specified months earlier still. Hence the products,packages and discount schemes you can offer may be available elsewhere in the market(albeit perhaps not at the same price), and your bill presentation facilities will not beunique. Even if you are careful with your requirements, it is possible that the system maybe used by your competition – this may or may not present a problem to your ProductManagement or Marketing people.

5.3.1.1 Advantages

• A product version would normally be available immediately to get the operation startedquickly

15 See: PBI Media Report 2000, Build, Develop, Outsource.



• Other companies will have used and proven at least part of the software, reducing therisk

• The development investment tends to be spread by the vendor across a number ofcustomers, reducing the cost of delivery of billing.

5.3.1.2 Disadvantages

• There is an initial investment required for servers and software, but thereafter cashflow would be at maintenance levels

• You will need to recruit and train operations staff and some level of in-house ITexpertise, albeit at average skill levels, to manage the operation on a day-by-day basis

• Your systems functionality and presentation capabilities will not be unique in themarket.

5.3.2 BuildThis approach implies you will use your own IT department expertise to design anddevelop a bespoke system solution, exactly tailored for your requirements. It usuallyinvolves a longer lead time and maintainability issues downstream, but presents anopportunity to offer unique products, services or discounts and differentiated customersupport that packaged solutions may not offer.Rapid application development techniques can mean that in-house bespoke solutions willbe delivered in acceptable lead times, comparable to Buy solutions involving extensivecustomisation. You need your own IT department and internal specification, design andtesting capability, but the result will be unique.Ultimately, building a solution may be the only approach, should timescales, performanceor capacity constraints of standard packages be reached. One example was an Italianmobile operator, experiencing such a massive growth rate in numbers of customers andCDRs that it predicted only months to reach the outer capacity limits of their package,even customised for performance. The company’s best investment choice was to developan ultra-high-performance bespoke solution for the core rating and billing engine, but wasable to retain many other components of the package that that were less critical.

5.3.2.1 Advantages

• The solution would normally be tailored precisely to your requirements, includingproduct pricing, bundling and discounting features, capacity and performance

• The software would offer unique features and differentiators (note the original uniqueimpact of ‘Friends and Family’)

• Overall costs and lead times may be comparable to (or even lower than) heavycustomisation of a package

• The life of the system may be expected to be longer than for Buy.


• A major investment is required for IT design and development staff, some at highcompetence levels, as well as a need to retain and motivate them for ongoing supportand maintenance tasks

• There would be an investment in development computer facilities as well asoperational platforms

• There is a high but manageable risk of failure, from accidentally poor specification,design or development

• As for Buy, you will need to provide and train operations staff to manage the operationon a day-by-day basis.



5.3.3 OutsourceOutsourcing is a variation on the traditional service bureau concept, whereby an externalsupplier owns the operational computer systems and provides a billing service to yourcompany. You feed their systems with the event records, they do the rest. This impliesthey invest in the hardware, they employ the operational, IT and support personnel andyou pay licence fees, generally based on billed revenues and volumes. You also acceptthe consequences of relying on another company for a critical core operation – notnecessarily a bad thing.There are two main types of outsourced operation16. The first is the traditional ServiceBureau model, running your systems on their computers, on your behalf (this might beanalogous to a car valeting service: they take your car away, service it and return it in anagreed time to an agreed quality). The second type is the Application Service Provider(ASP) model, where they run their systems on their computers, on your behalf (perhapsanalogous to a mobile valeting service, whereby you can see the car (or, examine thedata) while the service is in process). [Apologies both to Bureaux, ASPs and car valetingservices if the comparison is considered unfair].Outsourcing is very convenient if you have a new product or service that is undergoingtrial deployment. This can occur at start-up, perhaps while you evaluate market responseto a new product or pricing scheme, or perhaps while you wait for the IT department toimplement the billing changes necessary to bill for it. There is a low capital investmentrequired, but running costs will tend to be higher (to cover the supplier’s investment).Unlike an in-sourced approach, however, outsourcing does not have to be considered asa long-term solution; although there may be long-term cost considerations, it is viable if itis convenient.You must have a clear Service Level Agreement (SLA) with the supplier to cover allaspects of the operation, including: CDR collection cycles, output delivery deadlines,overall performance, response times to correct problems, cover at weekends and holidayperiods, and most importantly, responsibility for errors. To achieve process turn-roundtimes comparable to in-house operations, there would need to be a direct, high-performance data link between your network switches and the outsource partner’splatforms.Many companies believe you should have an SLA when dealing with in-house operations,and at the same level of detail as that suitable for outsourcing. This is formed on theprinciple that if you cannot manage the operation internally, you may not be able tomanage it externally (and vice versa).

5.3.3.1 Advantages

• The lead time to establish billing is about the minimum achievable. Billing can beestablished within a period measured in days

• Minimum investment in operational staff and equipment• Minimum risk approach• There is a cash flow advantage because the initial investment is limited to set-up costs

only, and ongoing charges are based on billed revenue.• The billing system is already established and fully operational.

16 See also: PBI Media White Paper November 2001, Outsourced Billing –Market drivers, models and pricing for development in Europe




• It may happen that the server is remote from the telco, which should not in practicepresent operational difficulties provided it is a 24x7x365 service

• Tendency to be the least customised approach (although this might not apply to thepresentation and house style of the user interface)

• The unit cost per bill will be higher than for an in-house solution• Detailed knowledge of the billing system and its maintenance will be held by the

outsource partner, not kept in-house. Many view this as high risk.• Data security implications for valuable customer records.

5.4 Planning

A common feature of billing implementation projects is an enormous pressure to get theproject completed quickly. The sooner the billing system is up and running, the soonerthat revenues can be collected for the business, so the timeframe set by management isalways less than needed under the circumstances. This makes planning and soundproject management two of the critical success factors.A high-level view of the overall programme of work will have three main streams ofactivity: the Service Delivery or network management side of the business, the ITresponsibility domain and Operations. The streams are by no means independent. Theplans for each have to come together at the end, but might initially look as shown in thediagram.

Fig.26 Outline Implementation Programme

OpsStrategy

NetworkStrategy

ITStrategy

ProcessDef’n

R’qtsDef’n

Procure/DevelopSystems

AcceptceCriteria

WorkingPract’s

Build Training Recruit

& TrainCSRs User

AcceptTest

OpsReadyTest

BusinessStrategy

VendorTesting

Integr’nTest

Build & Test

Network

Build IT Infrast’r

Install’nTest

ProcureNetwork

Resil’ce&Perfmce

Test



Whilst this diagram shows some dependency between the streams, it does not show therelative timing of the tasks concerned. The notional Gant chart gives a clearer picture ofthe more likely sequence of events. Note the importance of Change Managementactivities, right from the start.

Fig.27 The Programme Plan

Strategy

Programme management

Process design

Procurement & Gap Analysis

Development/Delivery

Testing

Training

Acceptance and rollout

Change management

Working practices

Requirements & Acceptance criteria

5.5 Testing

One problem with the logic of the plan outlined above is that Testing has to start soonerthan at the end of Building, and even before the end of Process Design. Because of thetime pressure, testing time is usually compromised – there has to be a balance betweengoing live with faulty systems and loss of business through not going live. It’s a matter ofrisk assessment, and it varies from company to company. In fact, testing activity needs tostart from very early in the project:

! Do the process models logically and fully describe the main businessactivities?

! Are the Requirements complete and consistent?! How can each Requirement be tested, to see if it has been met?! What business situations are needed to test Working Practice definitions?! How thorough and consistent is the Quality Assurance approach used by the

system developers?



! What test data and expected results are needed to support User Testing?! How are we to measure Acceptance?! What provision is there in the plan, for testing?

Thorough testing has several stages. In this example, the vendor could be an internal ITdepartment responsible for development and delivery of the system:

! Unit testing (performed by the developer) – to confirm that each individualmodule is coded correctly

! Component testing (performed by the vendor) – to confirm each component orsubsystem meets the design specification

! System testing (performed by the vendor) – to ensure all system functions areexecuted correctly

! Interface and Integration testing (performed by the integrator) – to ensuredifferent systems elements interact correctly

! Resilience testing (performed by IT and operations) – to ensure recovery inthe event of a crash

! User Acceptance testing (performed by business users)! Operational Readiness testing (performed by personnel involved in day-to-day

running) – to ensure everyone and everything is ready to go live! Performance testing (performed by IT and operations) – to ensure that

planned operational volumes can be processed in the time available.

5.6 Acceptance Criteria

The concept here is to define the basis on which you would be prepared to pay for and golive with the chosen solution. Acceptance criteria should be defined and appliedcontractually for any approach, since they define the expected capability and acceptablelevels of failure to comply.It is customary to define acceptance criteria in terms of specific functional or performancecapabilities. Acceptability has to be clearly defined, quantified in terms of numbers andseverity levels of errors or points of non-compliance for contractual clarity.Error severity is generally defined at three or four levels, approximately:

! Severity One – the system is unusable and cannot handle normal workloadsor deliver valid outputs or has a global scope error that precludes partialworking

! Severity Two – the system has a major error or fault that prevents completionof normal work, but is localised so that the impact can be compartmentalised

! Severity Three – the system has a localised error that will cause it to produceincorrect output if processing were to run to completion but which does notprevent partial working

! Severity Four – the system has a fault that may be described as documentary,cosmetic or inconvenient, but which does not prevent completion of normalwork.

What the Acceptance Criteria must state is the number of each of these that are allowedbefore non-payment or penalties apply. For example: ‘for initial use, acceptability isdefined as zero Severity One and Two, no more than ten Severity Three and no morethan thirty Severity Four.



Clearly, for any fault to be classified as a given type of error, the correct functioning shouldalso have been previously defined, either in the original Requirements or in subsequentappendices or annexes, or in approved change requests.The need to identify faults in turn implies that a managed programme of testing will beundertaken, in order to identify and track tests, results and incidents (problems or faults).The full specification of an end-to-end strategy for software Quality Assurance (includingvendor activities) and acceptance testing is beyond the scope of this document.The need to track incidents and when a given item of functionality is due to be delivered orrepaired, in turn implies that suitable incident management and IT configurationmanagement processes are needed – but that’s another story.

5.7 Migration Projects

“Migrating a Billing system is like changing the engine on a Jumbo jet, only at 33,000 feetand 500 miles per hour.” Thus began a telecoms conference presentation, offering adviceon how to approach migration projects.Even if the old system is still running operationally, there have to be basic reasons for themigration:

! Increase capacity and improve performance! Capability to bill for new products, price plans and discount schemes! Mergers and acquisitions – consolidating two or more billing databases from

different source companies, or standardising on one billing platform! Disposals – creating a new billing environment for selected customers and

products! Convergence (or divergence).

Earlier in this chapter, the issues of selecting and implementing a new billing system werereviewed, but within the topic of implementation, the real challenges of migration were not.Here are some of the challenges, and some considerations regarding the migrationprocess.

5.7.1 Data ChallengesOf course, many of the problems boil down to the quality of the data. Perhaps the sourcedata in the old system was never subjected to the rigour of the validation mechanismsbuilt into the new, so at first sight it may be all unusable. Not a good start.In preparation for the move, we assume that competent data analysts have performed adetailed cross-mapping of old data fields to their new system equivalents. How do theindividual fields compare? What will we do about the differences? Some of the questionsinclude these:

! Data entities – Does the new entity/relationship model have anything like thesame elements as the old? How do they correspond? Is the new model moreor less restrictive in handling, for example, customer account or productcomponent hierarchies?

! Data attributes – Do all the old elements have an equivalent in the newrecords? Does the new have meaningful spare elements that can be used forthe extras?

! Field and array sizes – Do the maximum old data values fit into the new? Canthe old address line fit into the new? Are there enough address lines?



! Content values – Do the field codes have the same range of values, or is thenew range a subset/superset? Do old and new equivalent values actuallyhave the same meaning or interpretation? If the new range is a superset,what do we plan to do about expanding old instances to new?

! Customer records – Do the old customers exist in the new database already?How are we to recognise and match them? Did both systems use exactly thesame naming conventions and abbreviations?

! Post codes (and other similar reference fields) – Did we originally check everyaddress against its postcode in the old system, and if not, how is Marketing toget accurate geographic and demographic information from the migrated datasets? Does it matter?

There are several other reconciliation-related operational considerations:! Do the old and new billing and financial controls have a direct

correspondence? How exactly will we reconcile old system controls to thenew ones during and after migration?

! How many records are there in the old system, of which types (or entity typesand instances)? And of what data quality? Have we run analysis andsampling programs against the old system (and the new, if it already containsdata) to confirm every one of our assumptions?

! Will we run the same billing cycles? If not, how will we reconcile old and newcycles?

! How will we compare data sets, bill run results and control values forconfidence and audit acceptance purposes, before and after the migration?

! How are product reporting, financial and management information outputs tobe compared? If we have a different result in the new system, can we explainand reconcile the difference? What is considered a satisfactory degree ofconsistency?

One of the many problems is that we will probably encounter faults in the old systems, olddata sets or in the old processes (as discussed under Revenue Assurance) that are notpresent in the new. This makes reconciliation particularly difficult, as the outputs from oldand new will never match. It has also occasionally been known that the new systemcontained errors not present in the old system…For these reasons, it is essential for Audit to be involved all the way, right from the start ofthe planning process. It is vital that the acceptance of the new system is achieved withtheir full understanding and endorsement of the migration process, particularly regardingerror corrections in the old data and modifications to auditable data values.

5.8 Resourcing

One of the great challenges for a telecoms enterprise is the attraction and retention ofgood personnel17. The competition is intense for experienced staff, so resourcingbecomes a key function, a critical success factor. In general, the company has threeoptions:

! Permanent staff! Contractors

17 See: PBI Media Report: Telecoms IT, Billing & Customer Care Skills andSalaries Survey 2000. Also the sequel survey in 2001 atwww.globalbilling.org (within the GBA’s Knowledge Bank section)



! Consultancy firmsIn practice, a mix of personnel is most likely.

5.8.1 Permanent StaffWhen your new project comes along, you may find your existing permanent staff are notavailable, being already fully occupied on other essential tasks, or they may not beexperienced in the new software or technique. Hence you will incur a steady overhead(and project lead times) for training, otherwise they may not perform at the speed or skilllevel of an experienced person. Their contribution should be frequently appraised andsincerely appreciated.Permanent staff are generally thought to be the least expensive option, but opinions varyon this. Permanent staff can require high overheads, and in some cases the salariesneeded to attract key personnel are high. There is always a volatility factor – once youhave trained them, they are more valuable elsewhere, so recruitment and retention willalways remain important.

5.8.2 ContractorsIn principle, you should be able to engage experienced specialist contractors with ease,provided there is a reasonable lead time. The theory goes that contractors aredisposable, but it is essential they are closely managed to ensure they remain fullyproductive – and never engage contractors on hourly rates. There is a risk of dependenceon contract staff, so certain roles may have to be appointed for lengthy periods – whichcan induce a measure of resentment from permanent staff.If the systems you deploy are extremely successful in their own markets, there might be ashortage of contractors with previous experience of the product. Check carefully toensure the contractors have actually worked where the product has been installed,particularly if the vendor is offering you a major new version.Professional standards of contractors vary widely, to both extremes, so the selectionprocess must be rigorous – do not be afraid to reject substandard contractors at any time.Being disposed of is supposed to be one of their operational hazards. Their contributionhas to be carefully managed and continuously monitored.The other issue arising from using contractors is the need for you to deal with Agencies.There are very few professional agents who understand the business of telecoms, whounderstand IT and who will take the time to understand the problem you are trying tosolve. Too many offer you glib stories of ‘expert recruitment personnel and a database ofthousands of contractors’, where in reality they are primarily interested in placingcontractors as a commodity. They use a ‘tick-in-the-box’ mentality for matching thecontractor’s alleged skills against their view of what you require, and are less interested inactually helping the client to address a shortage of expertise. By the time a position isadvertised, the requirement is distorted and diluted from what you want. They are notmuch help to the contractor either, most agents being significantly unprofessional inresponding to and managing contractors. The opinions expressed in this paragraph arebased on a sample of perhaps 50 agents over a period of twenty years.

5.8.3 ConsultanciesUsing consultancies is another form of outsourcing, whereby responsibility for a definedpiece of the work is given to another company. The cost will usually be the highest of thethree options, because you have to pay for the project risk they take on your behalf aswell as their overheads and profits. In return, they mitigate the risk, provided you havedefined their terms of reference precisely.



It has been known that some consultancies use under-experienced staff to fill out theresourcing of their client projects. One assumes this is done in the hope that senior staffwill compensate for the lack of experience of the juniors, that the client won’t noticeanything and that lack of business knowledge doesn’t matter if the consultants’methodology is good. Unfortunately they don’t, they do and it does, respectively.Interview every new member of their team – you are paying, after all.There are other models whereby the consultancy offsets a part of their fees againstshares in the client business. Then both parties share in the benefit of a successfulimplementation.



6 Recent and Emerging Changes in Billing Practice

6.1 Electronic Bill Presentment and Payment (EBPP)

When first introduced, call itemisation was seen as a major benefit. Customers were ableto see and validate how their invoice had been derived from their usage. The bill providedan audit trail, permitting the individual to have clear visibility of unit call pricing accuracy.Call itemisation led to multi-page statements. In some cases, larger corporate customersreceived several boxes of stationery, unwieldy and impractical. The next obvious stepwas to provide itemisation on electronic media, initially floppy disk but usually CD-ROM.The customer could then study and analyse the data according to any convenient formula.This delivered real usability benefits to the customer.Surveys of customers’ use of itemisation found that in practice they do not always wish toaccess all the details – only on doubt or dispute, perhaps when the invoice total wassignificantly different to that expected. Processing the detail was a different matterentirely. Customer management needed to allocate costs, to find exceptions, to locateunauthorised usage, to assess the performance of different sales employees againsttelephony usage, and so on.What was required was an entirely electronic means of sending the invoice anditemisation data to the customer. This minimised invoice preparation and distributioncosts as well as shortening delivery lead time, with no loss of customer service quality.The first challenge was legislative18. In many countries it is not legal to send an invoicevia email – a paper copy is required to meet the needs of taxation and audit laws. Thiscan be easily overcome by sending the ‘original’ paper invoice somewhat after the ‘copyadvice’ is sent by email. Provided the customer agrees to pay when advised in this way,(perhaps with a discount incentive), then the law and the business are both satisfied. Thefact that it is easier for the customer to authorise payment by email to internal cost centremanagement is also a benefit to the customer as well as reducing payment delays.The second challenge was security. Use of email and making the itemisation file availableon a website are not entirely secure. File transfer to deliver the itemisation detail file is notthe simplest and safest means. The solution was to offer encrypted attachments to emailthe invoice, and to provide the customer with access to their data on a restricted basisthrough a secure Internet website.The web presentation of the itemisation data becomes a valuable tool for marketing – aswell as a potential differentiator for the customer. Several EBPP products, using web-based billing platforms, allow powerful end-user selection, manipulation and analysistools. In this way the customer – or their cost centre managers and authorised personnelcan have access and process the itemisation data for any useful purpose.One outcome of such processing can be that the customer is able to identify their mostheavily-dialled destinations, thereby enabling negotiation of more competitive rates overthose routes. Hence, providing the information may not always benefit the provider, butperhaps the customer will appreciate the information value and will be less likely to churn.

18 See: PBI Media 2001 Report: EBPP – The Market Opportunity, and EBPPVendor Profiles



6.2 Customer Self-Care

Partly to keep incoming traffic down into the call centre, and partly to give the customergreater flexibility, an increasing number of providers offer secure internet websites for thecustomer to access their own billing records. Provided the customer is suitably identifiedfor security, this allows the customer to make their own enquiries and keep their ownrecords up to date. The customer is usually provided with facilities to enquire aboutaccount information and view call itemisation details.Several operators have extended the website facilities to include product ordering andservice management. This permits the customer great flexibility to maintain their ownchoices for call barring and service selection – and at a time of day convenient for them.This can be quite useful if the account holder is going on holiday and in the meantimeperhaps does not want premium rate or international calls to be made by other membersof the family.One of the key drivers for this initiative is the link between the number of call centrecontacts and operating costs19. Less incoming calls means that less CSRs are required toservice them. It has been recognised that encouraging more transactions to beconducted by the customer without using the call centre has a significant impact onreducing the total number of CSRs required.

6.3 Hot Billing and Real-Time Billing

The typical operational billing cycle produces invoices for the customer once per period,typically monthly. There are several circumstances giving reasons to reduce this delay,

19 See: PBI Media Report 2001, CRM to CMR – a paradigm shift in customercare.

Also: PBI Media Report 2002, CMR for the Wireless Industry



from the customer wishing to receive an interim account, to an account in the process ofbeing closed. Sometimes the desired response time is measured in hours (hot billing) tominutes or less (near real-time or real-time billing). This means that the NMS mustrecognise the request and treat the call and process the CDR differently to a normal post-paid call, and the billing system has to be ready to process the CDRs concerned.

6.3.1 Hot BillingThe concept of ‘hot billing’ is to be able to present a bill to the customer on request, oftenfor only some of the total services or CLIs used. The CDR thus rated has to be sentimmediately to the billing environment so that it can be presented to the customer. Thisservice is particularly valuable for hotels and business centres – except where they usesmart PBX facilities that perform the task locally.Customer accounts for hot-billed CDRs do not normally benefit from product and servicediscounts, particularly for those discounts for aggregated usage over the billing period. Itis feasible to apply a discount estimate or an allowance, possibly based on previousaccount performance, perhaps adjusted at period-end. This approach can introducecomplexities in the reporting and reconciliation process, so it is generally consideredeasier to provide hot billing conditional on discount exclusion – a small cost in return forthe facility.

6.3.2 (Near-) Real-Time BillingThe concept of Real Time Billing (RTB) is that the customer is to be billed while the call isin progress. In theory, it means that the customer’s account should be progressivelydebited during the call, and this should be visible to the customer while it happens. Thispresents an impossible problem for conventional billing environments, which cannotachieve a real-time response because of the inherent delays built into their batch-orientedarchitecture.There is a finite delay between the completion of the call, the generation of theconsequential CDR and the CDR being made available to the billing system, and anotherdelay while the billing system is cranked up and an ad-hoc cycle executed for the selectedaccount. This delay is an accumulation of operational batching steps (CDR generation,polling, collection, mediation and rating). Used on a selective basis, this overall cycle canoften be shortened, at best to around 15 minutes of the call being completed – in practice,it is a more typical two or three hours later.Real-time rating is possible with newer architectures, assuming the switching systemshave the rating capabilities needed to work out the value of the call. In addition, theswitch must have the ability to feed progressive debit data for the selected CLIs out to abill presentment mechanism for guiding and display. If used frequently, this functionalitywould tend to overload the switch. As things stand currently, this type of fast-responsefacility is mainly used (where available) for fraud detection and alarm functions. There isstill a finite external delay in presentment, so the overall approach is usually morecorrectly entitled ‘near-real-time billing’.The overall RTB functionality is sought mostly for internet and content delivery services.The nearest equivalent existing examples occur with coin-operated and pre-paid services,whereby the network systems check the remaining credit on call set-up and perform arating function while the call is in progress. However, in both these cases, whilst hisremaining credit is debited as the call progresses, the customer has explicitly paidbeforehand.



6.4 Billing Convergence and Integration

As the ownership of telecoms companies moves across the corporate landscape, there isan increasing collaboration between other industries and telecoms. Many new entrantowners from other fields, such as power distribution, rail and road networks as well asutilities, are able to capitalise on their traditional corporate assets such as real estate,customer base and distribution outlets. This means that there is an increasing interest inintegrating the telecoms customer database with information from the traditional base.Knowledge of a prospective customer’s high utility usage or poor past performance as adebtor, for example, can be valuable indicators of potential performance of a customerwhen attracted to the new telecoms offering. In several countries, however, a cross-flowof information is controlled by data protection legislation.Increasingly, innovative services are combining the convenience of mobile telephony withother types of billable event. For example, by connecting soft drink dispensing machinesto central computers, a call to a number associated with a particular machine triggers themachine to dispense a can, and the charge is added to the telephone bill. Ordering traveltickets and pizzas are other examples. Billing only has to cope with an additional type ofevent, assuming that it has facilities to look up one-time charges for that event type. Innovative types of event are increasing both in incidence and diversity as ‘m-commerce’takes hold, offering products and content over mobile services20. The range is limitless,but the customer has to be willing to purchase.

6.5 Billing for Internet Services

This is currently one of the more active areas for discussion. The particular interestdepends on whether one’s perspective is representing the customer, the telecoms carrier,the internet service provider (ISP), the website, the publisher or the content provider. Thebasic relationship model is shown in the diagram on the next page.In the first stage, a connection has to be made between the customer’s computer and theWeb. A typical customer is connected to a digital voice network using a circuit-switchedconnection, whereas the internet uses packet switching and a different transmissiontechnique (Internet Protocol or ‘IP’). To connect the computer, a voice call is placed to themost convenient Internet Service Provider (ISP) at their Point of Presence (POP). At thePOP, the modems make the handshake connection, and the transmission protocol isconverted to IP. The computer sends the user log-in string that is validated if necessaryat the POP, and the session commences.Billing so far comprises a recurring line rental to the end-customer, plus charges for theduration of the whole session, on the basis of a voice call connection to the ISP. Whetherthe call is actually billed at retail to the customer or at wholesale to the ISP depends onthe carrier’s contract with the ISP. The ISP may additionally charge the end-customer fora recurring internet access fee or subscription, or the ISP may choose to offset that feeagainst revenue from advertising. If the carrier charges the customer for the call, the ISPmay theoretically be able to charge the carrier a small amount, along the lines ofinterconnect, but this is not commonplace in view of the margins involved.

20 See: PBI Media Report 2002, CMR for the Wireless Industry, managingcosts, commerce and customer relations for the mobile industry.



Fig. 28 Basic Internet Charging

IP NetworkSP /PTT

POP

Site

CreditCard?

Goods/Services?

Access Charge? Service Charge?

Or Com m ission?

ISP

The service provider offers a portal into the internet, a point of presence to the world-wideweb and the point at which the customer’s account identity and security codes arechecked. They are in a position to control the customer’s access to internet transactions,and may or may not charge for this service; a service charge is more usually applied ifadvertising has a lower profile with that ISP. Through that portal, the customer hasunrestricted access to the web unless a filter or screening mechanism is provided by theISP.Meanwhile, assume the end-customer has navigated to a typical commercial website,which has goods or services to offer. The customer may face another restriction as partof the site service offering, having to register or pay a subscription fee, depending on thesite. The customer can be billed for the goods indirectly, through an essentially externaltransaction via credit card, provided directly (for example, by fax authorisation) or througha secure site with encrypted data protection.Neither the carrier nor the ISP has any awareness of the external credit card transaction,which is generally many times more valuable than the access charge to the customer. Asusual, the credit card company receives a commission on the sale, but it is unlikely thateither ISP or carrier can charge a commission to the web site for such transactions,because they are essentially unauditable. This situation remains unless the ISP and website owners have a close relationship and the customer’s origin can always be linked to agiven sale.

6.6 3G and UMTS: Charging for Content

In this model, the carrier provides the means for the customer to have a wide range oftelephony services, with an emphasis on having access to value-added service content.The end-user may be the customer or their delegate (e.g. an employee or family



member), so the end-user may not be the one receiving all the invoices, but could beresponsible for incurring many of the charges by using the services or accessing thecontent. When the additional entities are taken into account, the billing model becomesquite complex:

Fig.29 UMTS Role Model

VASP

SPSubscriber

User Net Operator

Source: UMTS Forum

Payment

Billing

Delegation ofService Usage

Payment

Subscription /Subscriber

Delegation ofService Usage

Payment

AccountingPayment

Billing

Payment

Usage

The carrier traditionally invoices the customer a recurring charge for access and callcharges for the time connected. Given the ‘always-on’ nature of the UMTS connection, itis as yet undecided how to charge for data calls. Because the percentage of traffic takenup by voice calls drops dramatically compared to data on UMTS, then voice calls willprobably be provided for a nominal cost or even free. Data connections may be chargedalong the lines of existing 2G (second generation) data services, per packet or permegabyte. Some parts of the connection may be absorbed by the ISP – it partly dependson the nature of the data being transmitted, and partly on the direction: an upload is notexpected to be either as large or as valuable as a download. The challenge to billing willbe to sort out the different events and work out how much to charge for each event and towhom21.So where does the “real” transaction leave the other participants? Working backwards:

! The telecoms operator at best receives a fee for the amount of datatransferred and can allocate a tiny proportion of the recurring access fee fromthe customer to the actual transaction. At worst, they receive a fee only for

21 See: PBI Media/Siticom Report 2001, The UMTS Technology and BillingChallenge



the call on a wholesale basis from the ISP. Having enabled a high-valuetransaction (without telecoms the purchase might actually not have beenmade), the operator receives the least part of the deal.

! The ISP may receive a commission from the vendor (in this case the website).That can be negotiated by recognising the captive market base of the ISP’scustomers, countered by restricting access to the publisher’s content library.The industry is still trying to devise content protection and encryption schemesthat limit end-use solely to the customer, but this is not resolved.

! The website pays the wholesale rate for the goods to the publisher orwholesaler

! The publisher pays a royalty back to the originating manufacturer, author orartist.

Even if the ‘goods’ are an MP3 music clip or a video or photo downloaded to thecustomer’s computer, then neither the ISP nor the carrier can detect it, as there is nodifference between data packets containing music and data packets containing email.Until a standard protocol is defined that will identify added-value transmissions, then theBilling industry will continue to research ways to bill the customer directly for the services,as another type of billable event presented on the telephone bill. Tracing the customer’sorigin depends on the web site’s knowing the IP address of the ISP, the dependent IPaddress of the customer, There is no immediate evidence of the customer’s CLI by thetime the IP packets reach the website, so nothing can be tracked back to the customer’stelephone account without collaboration between all parties.The originator may wish to modify their revenue model to reflect the ease of access by theend-customer. A piece of software, for example, may traditionally have been distributedon CD, but when offered on a website, a micro-billing charging model may be much moreeffective. Small financial transactions for use of the software may best be handled bybilling on the telephony account. If the service was an on-line accounting package, forexample, then the basis of charge could be one billable event per accounting transactionrecorded, perhaps on a tiered scale depending on volumes. If the service was an on-linegame, the charge could be per bullet and per soldier, perhaps on a sliding scaledepending on strength. If the service was a word processor, the charge could be permerged mail address, per spell-check operation or perhaps per thousand words.The billing challenge remains the same: to recognise the chargeable event, record it atsource, convey it to the billing environment, then determine how much to charge and towhom. As in the 2G access model described earlier, there has to be an auditable linkbetween the user and the event; in the 3G environment, there also has to be a linkbetween the user and the customer.

6.7 Quality of Service Pricing

In its simplest form, Quality of Service (QoS) pricing does not present an issue: thecustomer is offered better quality services for a higher price. However, some of thetransmission protocols such as ATM (asynchronous transfer mode) are designed to allowshared use of a high-capacity circuit by several customers. These services are valuablefor high-quality videoconferencing and voice facilities, where occasional packet loss is notas critical compared with data transmissions.The protocol is partly to make optimum use of the circuit and partly because eachcustomer does not make continuous high-rate transmissions. This can however give riseto service degradation as network load increases, which may mean that the service levelprovided falls below that committed, whereupon the customer becomes entitled to areduced rate or a discount.



For Billing, this means that service levels have to be continuously monitored on thenetwork. Measures of transmission error rates and packet loss per customer have to befed back to the billing system in order that actual performance can be compared againstcontracted levels. In this way a sliding scale discount can be applied to the specificservice for each customer according to those measures.

6.8 The Impact of Commoditisation

As more and more trunk capacity is built over the same routes, competitive pressuresdrive down the charges – unless, of course, there is an excess of demand over supply. Ifthere is substantial spare capacity, it is likely that the carrier will probably be supplyingwholesalers or service providers rather than (or as well as) end-customers in order tomaximise revenues.In many cases, supply is now exceeding demand by a substantial margin, and it willremain this way until more customers make more use of services that consume availablebandwidth. This means that carriers are forced to offer capacity at very low rates to getmarket share and revenues, increasingly on a commodity basis – perhaps at differentrates according to spot demand for capacity. It also means that billing has to allow theunit rate for capacity to vary widely per wholesaler and for unpredictable periods. Further,billing will have to be provided with data regarding the capacity purchased, as opposed tothat used, in order to calculate the charges.This leads to a new regime for wholesale billing. It was accustomed to having a smallnumber of wholesale customers purchasing or leasing fixed capacity over extendedperiods, a situation that was often billed simply from a spreadsheet. Instead, the carrierwill now have to deal with many customers, and perhaps only occasionally, or for a largernumber of shorter lease periods. A different form of billing is needed to support theincreased activity.

6.9 Reducing the Cost of Billing

It was traditional that billing capability was justified in order to be able to bill for theservices that attracted the customers in the first place, offering some service that gavecompetitive advantage to those customers – very often from the presentation and contentof the bill itself. Establishment of the billing environment usually involved a massiveinvestment over a number of years, covering many software components and hardwaresystems, personnel development and expertise.Once an enterprise is established, attention turns to corporate efficiency and operationalcost reduction initiatives. It soon becomes obvious that the investment in billingfunctionality and billing operations is disproportionately higher than for other parts of theoperation, and is increasingly seen as an expensive overhead rather than an investment.Analysis of operational costs (including software licences and staffing) will enable anaverage cost per invoice to be derived. This is an important measure, because if theaverage unit cost per bill is greater than the average revenue per bill, the enterprise has atleast one problem.Reducing the cost of billing is becoming an important initiative. Operators are becomingaware that the substantial licence costs for mainstream billing software products have tobe carefully justified, so new avenues are sought. These involve process improvements,product and pricing rationalisation and migration away from inefficient and hard-to-maintain legacy billing platforms, installing newer, more functionally rich and cost-effectivesoftware systems allowing the customer a greater range of choice in ways of dealing withthe company.



Appendix: Glossary of terms

References to other glossary terms are noted in italics

Description

2½G

GPRS enhancements to 2G protocols that improveperformance some way between 2G and 3G, basedextensively on the same network elements as 2G,thereby being cheaper to implement than 3G

2GCurrent mainstream “ second generation” GSMmobile technology, supporting adequate voiceand text message (SMS) services

3G

So-called “ Third Generation” technologysupporting high performance, high qualitymobile transmission, allowing (e.g.) mobilevideo telephony

ACD

Automated Call Distribution. A computer systemused in Call Centres that accepts incomingcalls or arranges outgoing calls and allocateseach to the next available CSR in turnaccording to a flexible set of rules

ATM Asynchronous Transfer Mode, a transmissionprotocol (or an Automated Teller Machine)

CDR

Call Detail Record, a computer record of allthe data about an individual call (or in thebroader sense, an Event) that allows trackingand billing to occur

CD-ROM

Compact Disk – Read Only Medium. Ubiquitouslarge-capacity digital storage medium formusic, CDRs, general computer data,photographs, etc.

Circuit

An electronic link between two customers thatis dedicated to their use for the duration ofthe connection (unless multi-drop). Allowsmaximum use of available capacity by thosecustomers. (See also Packet)

CLICalling Line Identification – how the networkrecognises an individual service instance (e.g.a domestic telephone number)

Cloud

A term used to describe the totality of networkequipment and inter-connections operated by acarrier (or other business entity) thatprovides the customer with the means of ‘makingthat call’

Credit Scoring

A technique of numerically assessing the likelycreditworthiness of potential customers basedon their volunteered answers to various socio-economic questions posed in their applicationfor new services or a new account

CRM

Customer Relationship Management, the scienceof dealing with customer problems, orders andrequests in order to maximise customersatisfaction, company revenues, marketingeffectiveness, etc



CSR

Customer Service Representative, the personnelresponsible for responding to customers’ needsusually at a Call Centre (or Contact Centre)for any industry dealing directly with theircustomers. Known also as CSEs (Executives) orAgents

CTIComputer Telephony Integration. Generic callcentre term for linking database informationwith calls to help the CSR

EBPP

Electronic Bill Presentment and Payment –electronically sending formatted informationabout bills and accompanying detail to thecustomer, by email or Internet web site access,with an electronic payment transaction in theother direction such as by Direct Debit.

e-commerce

The concept of trading over any electronicmedium, generally used to refer to Internettransactions, mostly without human intervention(except for the buyer’s). (See also m-commerce)

Fulfilment

The preparation and delivery of items needed tocomplete the supplier’s side of the contractwith the customer, including paperwork,equipment, “ freebies” etc

Gateway The point at which two different ‘clouds’ arephysically interconnected, usually at a switch

GSMGeneral System for Mobile (originally somethingin French). Most European mobile services areGSM

GPRSGeneral Packet Radio Service, a development ofGSM giving more speed to individual users forshort periods

IP

Internet Protocol. A resilient packet-basedtransmission technique that divides up the datato be sent in order to maximise the number ofdifferent messages that can concurrently sharea network (not their transmission efficiency).Delivers “ the Internet” , now popular formixed voice/data networks.

ISDN Integrated Services Digital Network

LockboxA banking service (more common in the US) foraccepting cheques direct into the bank ratherthan going via the payee

m-commerce

The concept of trading using mobile telephonyas a medium, perhaps benefiting from thenetwork’s knowledge of the customer’s generallocation (See also e-commerce)

Minutes

A measure of time used as a quantitative basisof charging, being on the one hand the durationof a single call instance and on the other, thebulk total of all calls in a given period fromor to another network

MP3A compression method most widely used tominimise the data size (hence transmissiontime) of music or sound clips



Multi-drop

A traditional method of sharing a single phoneline between a number of customers, usuallyallowing any one of them to use the line at atime (notwithstanding eavesdropping). Fine inremote areas with low usage.

NMS

Network Management System, the computersystem(s) responsible for controlling networktraffic, collecting usage (CDRs) and probleminformation and dealing with soft maintenanceissues

Packet

A conceptual envelope containing part of amessage being carried from one customer toanother. May be an amount of data or asoundbite from a voice call, allows efficientsharing of the network by relatively slowtraffic (see also circuit)

ParameterA variable data item whose value directs theprocessing of a system component (e.g.“ priority” , “ payment method” )

PINPersonal Identification Number. A passwordcode allegedly known only to the customer andthe system or network and used as a key

PlatformComputer hardware and software systemsproviding functionality to perform automatedbusiness operations

POP

Point of Presence. Where (usually, to dial) toget access to a service provider, to getsomewhere else, such as Internet or indirectaccess long-distance cheap phone calls

Price Plan

A set of prices and discount schemes for agroup of products and services that may beoffered to a defined range of customers for aperiod in time

Process The steps that have to be taken to complete abusiness action

ProcessDefinition

The recording of a Process design so thatpersonnel may be informed how to execute thesteps in a consistent and manageable fashion

ProtocolThe transmission technique or “ language” thatallows two network elements to talk to eachother and understand

PTTPost, Telephone and Telegraph – the formerestablished, usually Government-owned providerof those services

ResellerPurchaser of bulk capacity from telecomscarriers for resale at retail or wholesale at amargin

Roaming

The facility provided by a mobile serviceprovider to the customers of another providerto send and receive calls on their network, fora fee

Route orRouting

The actual path taken across one or morenetworks by a call or data transmission

ScalabilityThe quality of the feature of an IT system that



permits or inhibits an increase or decrease inprocessing capacity, often by an order ofmagnitude, without causing major chaos ormassive re-investment

ServiceActivation

Sending an instruction to network managementsystems that will allow a customer to accessand use a network service

SMS

Short Message Service, beloved of mobile-phone-owning students, as a usually inexpensive wayof sending short text messages to other mobilephones

SubscriptionA recurring regular fee for access to a serviceor network, once upon a time charged withovertones of exclusivity for the buyer

Transport The carriage of voice or data traffic

UMTS

Universal Mobile Telecommunications System.Imminent new “ 3G” ultra-high-performance“ always-on” mobile service, next Grail formany vendors, operators and providers. Movieson your mobile?

xDSL Digital Subscriber Line (with several “ x”variants, e.g. ADSL = Asymmetric DSL)



Tarifica services for Billing & CRM

REPORTS

IP and billing

• P2P – Evolution, Revolution or Flash in the Pan?

• EBPP – The Market Opportunity

• Re-engineering Billing for IP Content

Wireless & 3G

• The UMTS Technology and Billing Challenge

• Microtransactions, Billing and Payments

• CMR for the Wireless industry – Managing costs, commerce and customer relations

Best practice Handbooks

• Managing Successful Revenue Assurance

• CRM to CMR – a paradigm shift in customer care

• Marketing and Billing New Products – a winning combination

• The book of Billing for Telecommunications

Further details including Report table of contents at our website: www.billing.co.uk

WHITE PAPERS

• P2P Demystified – Introduction to technology and potential of Peer to Peer andPerson to Persons

http://www.billing.co.uk/



• The EBPP Selection Process – road to customer enlightenment or pathway to misery

• Asia Pacific in the frame to next EBPP rollout – EBPP developments in the AsiaPacific region

• Introduction to EBPP

• Interconnection – Practical Guide to Interconnection in the UK

• Towards a Content Economy – the Only Certainty is Uncertainty

• Choosing a Billing system

• How to avoid spending Zegabucks when choosing a billing system

• Outsourced billing: Market drivers, models and pricing for development in Europe

• CRM for Profit

• Customer Lifetime Value under the Microscope

Email: [email protected]

NEW SERVICES

Margin Management Briefings – applying Revenue Assurance to your business

Benchmarking Billing Operations – identifying best practice

CRM Workshops – Quantifying ROI of CRM initiatives – principles and methodologyapplied to your business

Contact: [email protected]



book of billing telecoms 1

Documents