As the digital economy expands with the rise of LTE, operators continuously seek innovation to better serve customers and compete. This is driving ever more sophisticated charging and billing requirements, challenging legacy infrastructures.
In this webinar slides, Corine Suscens from Openet and Telecom Guru, Tony Poulos examine key strategies for operators to innovate and compete in the LTE era.
The webinar presents insights on Charging and Billing for the Digital Economy, gathered from over 80 operators worldwide. It discusses:
•The future for traditional billing and IN charging
•Top strategies to innovate and accelerate time to market
•Successful strategies to build loyalty and increase ARPU
•Key statistics, use cases and real world examples
View the actual webinar at http://www.tmforum.org/RegisterforaWebinar/ChargingandBilling/53519/article.html
Good morning, good afternoon and good evening and thank you for investing your time today to discuss policy and charging – and more importantly, what’s next.
Every business in the digital economy today faces three major challenges:
How to transform IT and operations to dramatically reduce operating costs through automation; at minimal risk; and in a way that gives the business the agility it needs to get products to market at the speed of disruptive innovators
How to build an open digital ecosystem where new services can be delivered quickly, easily and securely with a wide range of business models and partners;
How to maximize your market share, customer growth and loyalty.
The Forum has three core programs designed to address each of these programs
Our Agile Business program (focuses on solving the challenges of established businesses seeking to transform the efficiency of their IT and operations with a low-risk, scalable approach. The program generates and leverages a broad range of expertise, research, best practices and standards proven to improve efficiency and agility through automation, reduction in operating costs; improvement of capital investment efficiency, and reduction in time-to-market.)
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Across these programs, we offer a variety of knowledge, tools and best practices to solve common issues surrounding: Big Data, Business process optimization, Revenue Management, Cloud and Virtualization, IT and Operations transformation and security, just to name a few.
“Over the Top” providers challenge traditional voice and messaging services, but offer new opportunities for partnership and increased profit
Emerging technologies offer new opportunities for enhanced services, better customer experience, and new offerings
Explosion of connected devices, both personal and M2M, enable a range of new mobile retail and wholesale offerings. We are entering a “Connected World” era
Traditional differentiators (speed, coverage, device selection) are less and less meaningful. How can we better differentiate and compete?
How can we maximize return on 4G/LTE/NGN investments?
Traditionally interaction with customers is limited to billing or top-up. How can we foster relationships with customers to reduce churn?
How can we improve our business models – not just on the retail side, but on the wholesale side?
What new opportunities can we invest in?
Thank you Tony and hello everyone,
I am Corine Suscens, Senior Marketing Manager at Openet
And I will spend the next 30 minutes or so presenting,
how charging and billing are expected to evolve in the digital economy
My presentation is mainly based on key findings from recent research,
that we carried out with over 80 operators worldwide
During my presentation, I will cover 3 main points:
What’s the future for IN pre-paid charging and traditional billing as LTE expands
What are the winning strategies for operators to accelerate innovation and increase ARPU
And finally I will focus on key use cases being rolled out and operator success stories
First let’s have a look into the future for legacy IN pre-paid charging and traditional billing as operators see it
There has been an on-going debate about IN pre-paid charging platforms and their future in a data centric world.
When we actually asked operators what they thought,
70% of them expect IN pre-paid charging systems to be replaced by real-time, online charging systems within the next 4 years.
For the majority of operators, this is mainly because IN charging systems were originally designed for traditional voice services.
As a result, operators find it complex, time consuming and costly to charge for data using IN systems.
This is typically the case for innovative use cases such as data service passes, shared data plans or dynamic pricing models where users can purchase additional services and have them charged and provisioned in real-time
Operators also find that they depend on the IN vendor to develop and configure services – which then affects their time to market and give them little flexibility
Finally operators view IN systems as very costly to own - they are typically based on proprietary hardware and specific to a single access network technology
All of these limitations affect operators ability to fully profit from the data opportunity and prompted many to initiate their replacement with real-time charging systems, designed for data.
And actually As Voice becomes data with voice over LTE, IN pre-paid charging systems are no longer required.
In my next slide, we will see how operators replacement plans goes beyond IN pre-paid platforms and also affects billing systems
Again, there has been a lot of discussions around the death of billing systems which Tony is very familiar with.
But looking at the facts, it seems that Tony’s predictions were actually correct
as 87% of the operators surveyed are telling us that billing systems will be replaced by real-time charging systems, within the next 4 years.
One of main reasons for this is the lack of real-time capabilities
which then restrict data innovation and their ability to meet their customers’ demand for immediacy
The other important point with traditional billing for post-paid on one side, and IN pre-paid charging on the other
is that many operators have ended up with silo based architectures, which then resulted in
Slower time to market with multiple systems to configure to launch offerings
No unified view of individual customers as the customer data is distributed – which then affects customer visibility, customer service, and upselling
Silo based architectures also means Service restrictions to customers - with some services like roaming only available for postpaid customers for example or real-time visibility and advice of charge only available for pre-paid customers
Knowing these limitations, many operators have already taken steps to evolve their traditional IN charging and billing infrastructures to build a revenue-generating infrastructure based on convergent real-time charging.
In my next slides, I will briefly show you two LTE operator examples from Europe and North America
The most recent example is T-Mobile Netherlands who is implementing an Online Charging System to completely replace their IN pre-paid charging system and have one single real-time charging system for all voice and data services.
It’s worth noting that their solution also includes a centralised offer catalog to quickly define and launch services centrally
Overall their goal is to enable more sophisticated charging models, launch services faster, reduce complexity and cost and maximize customer satisfaction
Among other use cases, the solution will enable
Dynamic pricing models
Innovative device plans
Rich customer engagement
Combinations of services for pre-paid and post-paid subscribers
My next case study shows a different approach from an LTE operator in North America
This operator is using OCS to extend their IN platform capability to support 3G & 4G services.
Their goal is to capitalize on their existing infrastructure investment
to launch next generation services, accelerate time to market, and offer more flexibility to customers
Some of the use cases supported include:
In-app charging / billing
Shared data plans
Hybrid pre-paid and post-paid accounts
Real-time usage visibility and notifications
Cross service promotions
Support MVNOs
These 2 examples show two different approaches for operators but in the end most operators are saying that traditional IN pre-paid platforms will be replaced.
The goal here being to have a more flexible infrastructure that will enable them to accelerate innovation and ARPU
- Which is my next chapter
In this section, I will discuss key strategies to accelerate innovation and increase ARPU in operators’ views
As we saw before, the future is all about Real-time charging and 79% of operators view it as critical to enable innovation.
What they want is a real-time charging capability that is truly flexible and convergent,
To enable innovation with sophisticated data pricing plans and bundles, and dynamic pricing models for instance.
Convergent, Real-time charging also helps operators to deliver a better customer experience
It lifts service restrictions based on payment type and allows all services to be launched to all customers, whether pre-paid or post-paid.
It also provides customers the flexibility to use multiple payment options
And benefit from real-time visibility over their services and usage, whether pre-paid or post-paid
Finally convergent, real-time charging is more cost effective for operators
and helps accelerate time to market as they can use a single platform to launch all services.
However, to enable many of the sophisticated data use cases that we are seeing today, real-time charging also requires integration with policy control
In our research 73% of operators view Policy and charging control or PCC as key in enabling innovation
PCC enables innovative business models such as multi-device and shared data plans or application specific pricing
It also coordinates network resources with new options for revenue generation, such as speed tiers or speed boost
And finally with PCC, operators can ensure a high quality of experience through real-time control and appropriate resource allocation –
It’s critical for use cases such as traffic prioritization for premium customers, Wi-fi offloading or VoLTE.
In my next slide we will see how operators can bring to market all these innovative services, much faster
In the research, the most successful strategy to accelerate time to market in the view of 79% of operators is to use a centralised offer catalog.
This was immediately followed by centralised, convergent charging and the ability to configure offers with minimum involvement from vendors
The main benefit of a centralised offer catalog is that it enables operators to create, launch and manage all offers to all customers in a central place
- Which greatly simplifies processes and significantly saves time.
As a result campaigns and bundles can be rolled out much faster
A recent example from my first case study is T-Mobile Netherlands – and we expect many operators to follow.
My last point in this section is about stimulating loyalty and ARPU
The research suggests that the most successful approach to stimulate loyalty and ARPU
is to enable customers, to purchase their services directly on the device, and have them provisioned in real time
– overall, it’s all about better engaging with customers, in real time, on the device. This means:
Sending offers that take into account their personal context in real-time - as an example, a customer attempts to access data without a data plan can trigger a data offer. as we will see later on, this kind of approach is very effective
Another effective upselling strategy is simply to combine offers with usage alerts -
By doing so, one of Openet’s customers achieved an average of 20% sales conversion rate, simply by up-selling data in combination with threshold alerts
Upselling add-ons to base contracts can also be extremely effective in stimulating spend
A good example is Pelephone – they offer customers a base plan with modest data allowance – customers can then add as many 5 Euro/month data blocks as they wish. As a result, 60% of their customers buy data add-ons and spend on average an extra 4.1 euros per month
An add-on could be an additional package that increases the data volume, or speed or give unlimited access to a specific application such as facebook
Last but not least, one of the key strategies for operators to stimulate loyalty, is to offer customers real-time visibility over costs and usage, on the device, through real-time alerts and dashboards, for instance
Overall, on-device purchase and engagement enables operators to maximize revenue, by pushing offers at the most opportune time and by enabling instant purchasing anywhere. It also enables them to save costs related to customer services and sales
This approach also provides Unprecedented satisfaction for customers by giving them the level of flexibility, convenience and visibility that they craveEngaging with customers this way is a recent area of innovation and requires an extension of PCC to the device
Now that we’ve seen the critical role of PCC in enabling innovation, let’s have a look at key use cases and operator success stories
On this slide you can see the most popular use cases being rolled out by operators. The red section represents the proportion of operators who are not planning to offer the related services – the other colours highlight services that operators are offering or wish to offer.
I won’t cover all the use cases here – I just want to highlight the top 4 use cases which are:
Multi-device plans
Data passes
Shared data plans
And Speed tiers
In my next slides I will show you concrete examples and success stories related to these 4 use cases
Multi device, shared data plans were launched in North America in 2012 and shown great success.
They allow multiple users and devices to share a common pot of data,
And have resulted in increased data usage and spend
Verizon for instance now has 30% of their accounts on a ‘share everything’ plan
They now report an average revenue per account (ARPA) which is up 6.9%,
and they have 34.9M post-paid accounts with an average of 2.67 connections per account
AT&T also reported almost 10M customers on their Mobile Share plans, with over 25% of those accounts opting to go with a data plan with 10GB or over
The success of shared data plan in the US is also reaching the rest of the world.
In March 2013 for instance, Swedish operator Telia launched their own Mobile Share Plan, Telstra in Australia is planning to do the same,
and more operators are expected to follow
The next success story is about data service passes
This case study is about how an operator used data service passes to upsell data services to reluctant customers,
and the resulting impact on revenue, customer satisfaction and cost savings.
This operator launched data day and week passes combined with real-time alerts, to remove all uncertainty around charging and usage, and encourage customers who didn’t have a data plan to try data services. The way it works is if a customer try to consume any data or application without a data plan, they instantly get a message offering them some data pass options. This is a very good example of real-time, context-aware offer.
As a result of this, they converted 10% of their data pass users to recurring monthly data plans;
they achieved 26% growth in data users, and 17% growth in data revenue.
they also eliminated 98% of credits that mostly went to compensating customers for unexpected charges,
and they reduced the number of customer care calls by 120 000 per year. This is saving them tens of millions of dollars, whilst increasing customer satisfaction and, average revenue per user, all thanks to data service passes.
My last success story is about speed tiers
This is an interesting example showing how Swisscom is offering unlimited data but with differing speed and subsequent price.
This enables them to meet various customer needs whilst better linking network resources allocated to revenue
As a result overall they saw their ARPU grow even though it initially declined as they expected
To sum it all up.
To be successful in the digital era,
operators are expected to replace their traditional IN charging and billing systems, originally designed for voice
with real-time charging, OCS systems designed for data.
A number of operators have actually already initiated this infrastructure evolution and are replacing their traditional IN charging platforms
The goal for operator here is to accelerate data service innovation – and in their view the top capabilities they require are
A real-time charging capability that is truly flexible and convergent
The integration of real-time charging with policy control
And a centralised offer catalog to rapidly create and launch all offers
The other main goal for operators is to stimulate loyalty and ARPU and in their view
One the most successful strategy to achieve this is to enable customers to purchase services in real-time on the device and overall better engage with them on the device to upsell and update them
This level of customer engagement requires PCC extended to the device.
I will end my presentation with a last slide to briefly introduce Openet to you before we start the Q&A
For those of you who don’t know Openet, I can sum it up in 5 words, we make data make money.
Our transaction management software is used predominantly by tier 1 operators,
to monitor and control network access,
to perform real-time charging,
and to enable network analytics and usage monitoring.
This is the end of my presentation.
Thank you very much for attending.
We will now start the Q&A session with Tony
Good morning, good afternoon and good evening and thank you for investing your time today to discuss policy and charging – and more importantly, what’s next.