BSS: The Combo Approach

Integrating pre-paid and post-paid billing systems is one of the biggest
hypes in the market in recent times. Allegedly a campaign by post-paid billing
vendors eyeing the increasingly burgeoning pre-paid market, the pitch has been
to enable flexible billing mechanisms for pre-paid users. Though converging
pre-paid and post-paid billing systems does not strictly amount to unified
billing, it can be a significant issue. With 80 percent (TRAI figure)
subscribers being pre-paid customers, integrating pre-paid and post paid billing
is significant not only for operators going in for unified licensing but even
for stand-alone operators like Hutch.

Mobile operators are now faced with two realities. One, pre-paid users will
have to be treated at par with post-paid subscribers offering similar service
and two, efforts have to be made to increase the ARPUs of pre-paid customers. To
some extent, mobile operators have already seen increased ARPUs from pre-paid
subscribers. In the last July- September quarter, ARPU from pre-paid customers
increased by 8 percent as against an almost flat growth among post-paid
subscribers. The minutes of usage (MOU) in the pre-paid segment increased by 22
percent while in post-paid, it has grown only by 15 percent.

“Most of the action in the billing space will be centered around wireless, content, data and IP,” says Ashwani Vachher of Portal Software

Even more encouraging is that the same survey has indicated a growth in the
number of outgoing calls among pre-paid subscribers. This is good news for
mobile operators and also the right time to mine this base of subscribers.
Pre-paid customers have traditionally been treated indifferently by operators
because the billing systems are installed in intelligent network (IN) systems
which can only authenticate the user and do not have a mediation software.
Operators do not have detailed data about pre-paid customers to develop targeted
tariff plans. This creates a gap between the pre-paid customer and the operator
with the only contact point being the dealer. Therefore, the churn in this
segment is high leading to higher customer acquisition costs.

Yet, most mobile service providers are not planning to integrate their
pre-paid and post-paid billing systems immediately. Escotel Mobile is about to
launch a system, which can profile the usage pattern of the pre-paid customer.
Escotel plans to identify high-value pre-paid users and counsel them to adopt a
suitable plan. The company plans to develop more targeted plans based on this
data and also integrate their billing systems sometime later.

Some operators have not altogether discounted the possibility of integrating
the pre and post-paid database. Says Arvind Pandey, CIO of Hutch says, "The
market is still pre-dominantly driven by voice but, we do see some maturing of
the market by the end of 2004 in the metros. That is when we shall think of
consolidating our billing." In the same breath he also added that it is
difficult to predict market dynamics and the imperative to respond to the market
could advance the integration of pre-paid and post-paid database.

“We do see some maturing of the market by the end of 2004 in the metros and shall think of consolidating our billing then,” Arvind Pandey, CIO, Hutch

AirTel, a player with heavy focus on pre-paid is still evaluating the
possibilities of converging its pre-paid and post-paid billing systems.
According to sources, Bharti may integrate its billing solutions for mobile
subscribers over the next year and a half.

Today, many vendors offer converged pre-paid and post-paid billing and
customer-care systems. Yet it is unlikely that operators will replace their
existing legacy infrastructure with a single platform. They are likely to
approach the issue keeping in mind the status of their legacy systems, immediate
capital expenditure and priorities.

Billing vendors are pitching aggressively to woo mobile operators. Says
Ashwani Vachher of Portal Software, "Most of the action in the billing
space will be centered around wireless, content, data and IP simply because this
is the fastest growing sector."

In reality we see mobile service providers constrained by billing limitations
to position their products differentially. While mobile operators can price
different products, they do not have the capability for differential pricing
within the same product. For instance, ringtones are charged a flat rate of Rs
10. "However, there is enough scope to charge a premium to download a
ringtone from the latest Hindi movie visa-a-viz a less popular ringtone.
Similarly, in the case of SMS alerts, it is high time operators charged a
premium for the latest score updates on cricket," says Vachher. Another
area of concern just now is that operators do not charge for downloads in
real-time. This is potential revenue loss for operators as all downloads do not
require same airtime.

Balaka Baruah Aggarwal