BSS: Waiting to Be Tapped

The Indian telecom sector has ex-perienced one of the most dramat ic growth
phases in recent times. According to TRAI, the gross subscriber base of cellular
and fixed line during the last July-September quarter stood at 64.77 million up
from 58.70 million as on June 2003, registering 9.37 percent growth during the
quarter.

The gross tele-density of the country now stands at 6.48 percent, which has
grown over 10.4 percent since the previous quarter. It is expected that the
targeted tele-density of 7 by March 2005 will be achieved during the next
quarter, 15 months ahead of schedule.

Everything is, however, not hunky-dory in the sector. The ARPU of cellular
mobile subscribers has come down from Rs 871 during the year 2002 to Rs 522 in
the April-June quarter to Rs 516 in the July-September quarter of 2003–clearly
on the slide. While basic services have shown an increase in ARPU, it is
attributed to the increase in WLL subscribers since June.

This is also expected
to taper off after a while.

In light of this, telecom service providers should look at the impending
unified licensing regime as an opportunity and consolidate their offerings.
Consolidated offerings will enable service providers cross subsidize offerings
and enable cross-technology promotion of offerings. Central to this ability is
the requirement of a sophisticated billing solution.

The Opportunity

Upgrading billing solutions is a continuous process and in an ideal scenario
a service provider offering multiple services should unify its billing
solutions. The advent of unified licensing in India would be catalytic towards a
process that is inevitable.

Deepak Mittal, director of business development at Hughes Software Systems
thinks that unified licensing is just a milestone in the incremental regulatory
changes, which the Indian telecom sector has witnessed in recent times and
billing upgrades should happen in any case.

Yet, it presents an opportunity for those moving into the unified regime
because those players who apply for services across different technology
platforms would like to position themselves as convergence players.

For the customer, this convergence will manifest itself in two ways. The
customer will have one touch point for all his telecom needs–fixed line,
wireless, limited wireless, dial-up Internet access or DSL. Even for subsequent
customer support, the customer will need to speak to only one support center for
any issues that he may have.

Second, the customer will get a consolidated bill for all telecom services
availed. Payment would be a single-point process without the headache of having
different deadlines and payment modes. Besides consolidated billing would give
corporate customers a holistic perspective of telecom expenses.

As a convergence player, the service provider’s imperative to provide
consolidated billing would be that much greater because of the need to maintain
a consistent look and feel of the services as an integrated service provider.

Not only would it be immensely convenient for the customer, it would also
imply many spin-offs for the service provider. For the service provider, the
point of contact would be a single identity number for all the services availed.
In legacy billing systems, each subscriber was identified with a telephone
number in the service provider’s database whereas in unified billing the
subscriber gets personified.

Second, a consolidated database would considerably reduce operational costs.
"Complexities of maintaining several billing solutions which demands a lot
of time and expenses would be done away with," says Ashwani Vachher, chief
solutions architect, India and Saarc, Portal Software.

Third, a consolidated database will enable the service provider to have a
cross-sectional view of its entire subscriber profile–a very potent tool in
the hands of its marketing department. The service provider can then apply
business analytic tools and develop targeted marketing campaigns. It could mean
that a service provider like MTNL who has lagged behind in cellular services
could aggressively bundle it with its fixed line or limited mobility services.

Finally, service providers can roll-out new products faster. The service
provider will just have to add an incremental module to the existing
architecture and not worry about compatibility since everything would be on an
integrated platform. As competition gets increasingly intense, time-to-market
will become a key differentiator in determining the success or failure of any
product.

Service providers have been quick to realize the value in providing unified
billing. From BSNL to Bharti, Hutch and Escotel, most service providers have
acknowledged the importance of providing unified billing. Says BSNL’s CMD,
Prithipal Singh, "Yes, we are planning to have convergent billing soon. We
are in the process of coming out with the tender to procure convergent
billing."

Reality Check

In reality, we may not see unified billing happening here so soon. Not
because service providers do not want to, but because there are certain
constraints which will not allow them to do it so easily.

The challenges would be different for each service to achieve unified
billing. For Reliance who has been able to leapfrog technology, the challenges
would be minimal as compared to BSNL or MTNL saddled with a legacy system.

Arun Kumar Aggarwal, regional director, Comptel Communications:  "Unless these processes are meticulously planned, the benefits of convergent billing like smoother administration, lower costs will not accrue to the service provider"

Both BSNL and MTNL’s billing systems for fixed line services are so
primitive that it does not even have mediation software. The billing systems are
based on bulk metering which is incapable of producing call detail records (CDRs).
Even service provisioning in many cases are done manually. So the first
challenge for the PSUs is to install mediation software and have CDR-based
billing. Both BSNL and MTNL have been in the process of tendering its CDR-based
billing system over the past one year! Given the scale and complexity of the
project it is not surprising. However, at least for its GSM operations, both
PSUs have CDR-based billing.

The next level of challenge for the PSUs, particularly BSNL would be to
centralize its billing operations. BSNL plans to divide its billing operations
into six zones across the country. This is in fact a challenge for some private
telecom providers also like Hutch, Bharti, or Idea Cellular who have acquired
different circles through mergers or acquisition.

Bharti does centralized billing for all its cellular operations from Delhi
while Hutch has centralized billing for the North and is in the process of doing
it in the South and West. Escotel has already centralized its billing at Delhi.
Idea Cellular is also in the process of moving towards to some standard
platform. Tata Indicom has already installed centralized billing for its CDMA
services at Hyderabad.

The next level of challenge for service providers would be to integrate its
databases across different services. The billing systems for wireline, wireless,
IP, long distance should be able to talk to each other. Operators have to ensure
that the integrated databases systems are flexible enough to adapt to quick
changes in tariff plans.

Bharti for example has foreseen this challenge and installed Kenan’s
billing solution for both its fixed and wireline services. Therefore,
integration of these services would not be a problem.

In fact, sources at Bharti say that at the corporate level, the company has
already rolled out its initiative to provide consolidated bills for its
corporate customers by April next year. The company plans to build an additional
layer in between the different billing systems to enable them to talk to each
other.

N Sivasamban, OSS head, TCS:  "Unifying different services would suddenly increase the subscriber base for which the service provider may not be prepared"

For those who have incompatible billing solutions in different networks, some
patchwork has to be done. Although it may work for immediate needs, experts
opine that in the long run it would be better to replace these systems and
install a platform that is truly convergent.

Another issue that service providers will have a tough time dealing with is
the integration of its pre-paid and post-paid service database. The pre-paid
database of mobile operators installed in the intelligent network (IN) systems
of the network is capable of only authenticating users and has no mediation
software. Therefore, integrating it with the post-paid billing would be a big
challenge.

While service providers go in for unified billing they have to keep in mind
the scalability of the billing systems. "Unifying different service would
suddenly increase the subscriber base for which the service provider may not be
prepared for," says TCS’ OSS head, N Sivasamban. A lot of old billing
systems of operators have become redundant because it could not handle the
increase in subscriber base.

Finally, service providers will have a huge challenge in re-engineering their
internal processes, which can make or mar the success of the initiative. Even
the most sophisticated convergent billing solution can fall flat on its face if
the service provider cannot successful re-align his internal processes.

A unified bill should logically be generated by integrated internal process.
But in reality, bill administration, activation, customer support in each of the
service wings of the same service provider are independent units which will have
to be galvanized into a single process for the customer to have a uniform
experience at all levels.

"Unless these processes are meticulously planned, the benefits of
convergent billing like smoother administration, lower costs would not accrue to
the service provider," says Arun Kumar Aggarwal, regional director, Comptel
Communications. "A major hurdle in process related changes would be the
ability to handle mindset-related issues" adds Kumar. If employees resist
process-related changes, the initiative would not be successful no matter
however meticulous or stringent the processes may be. This could especially be a
hurdle for incumbent service providers with its large base of employees
particularly at the clerical levels.

Operators have taken cognizance of the importance of having unified billing
and customer-care systems in the wake of unified licensing. Nobody has a roadmap
yet, not because it does not demand attention but because truly convergent
billing and customer care systems will call for revamping the entire billing
systems and internal structures, both of which are potential nightmares for
operators.

While unified billing and customer care are inevitable and may manifest at
the front-end in some form or other, at the back-end a piece-meal approach is
more likely as operators have to overcome many complexities to effect a smooth
transition.

Balaka Baruah Aggarwal

Escotel: Leveraging on Pre-paid

Escotel Mobile Communications is a cellular mobile service provider in UP
(West), Kerala and Haryana. It also has licenses for providing cellular services
in for UP (East), Rajasthan and Himachal Pradesh. It has a total base of over 7
lakh subscribers of which 65 percent are in the pre-paid segment. With an
overwhelming base in the pre-paid segment, the company decided to mine the usage
pattern to subscribers in order to have better understanding of subscribers. The
objective was two fold–reduce the churn rate as well as the cost of customer
acquisition. For this, the operator would establish direct contact with the
subscriber by providing detailed information about the customer’s usage on a
website.

This will be done by keeping a constant tab on customers by identifying the
IMEI number in the handset. Since pre-paid billing is installed in IN networks
and does not have a mediation software, operators do not have call detail
records (CDRs) of pre-paid customers.

Secondly, the pre-paid customer is unknown to the operator because the
customer contact point is only the dealer who sells recharge coupons.

With the help of this initiative, Escotel hopes to mine detailed data using
business-analysis tools and counsel the subscriber about a more appropriate
plan. "For instance, if we see a subscriber buying recharge coupons in Rs
500 denominations frequently during the same month we can counsel the customer
about the benefits of buying a Rs 1000 card recharge coupon as the airtime would
be higher, " says Satish Nair, head-customer care, Escotel Mobile
Communications. Dealers do not pass on such information to subscribers. At the
same time the operator hopes to identify high-value pre-paid customers and offer
him appropriate post-paid plans.

Second, the company expects to leverage this model to cooperate with the
police in tracking lost-handsets. This tracking mechanism will help the operator
track a lost handset if it is used within the same network. This service,
already launched in Kerala, has been able to recover about 20 percent of the 600
handsets reported lost since the launch of the service.