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Triple play - Dancing the three step
If operators are to successfully reap the rewards of triple play services, billing, revenue management and associated processes will have to quicken their footwork, says Bhaskar Gorti
Whatever particular image you choose to focus on, one of the most defining characteristics of successful telecoms service providers over the next few years must be agility – and that agility is going to have to be applied simultaneously in several forms and at several different places. For that to happen, billing, revenue management and all its related processes are also going to have to change step and learn to dance a lot faster, and with more partners than ever before, if the organisation isn't to lose its balance.
Most service providers already have initiatives underway that are designed to introduce the kinds of commercial agility long enjoyed by many other business sectors – initiatives that are essential if the Triple or Quad Play conundrum is to be resolved. For a start, they are separating their business processes from being trapped in the siloed confines of their underlying IT systems, using standardised architectures and definitions such as those developed by the TMF, and new technologies such as Service Oriented Architectures (SOA). Secondly, through the introduction of Service Delivery Platforms and product lifecycle management systems – and the longer term move towards open IMS platforms – they are beginning to make the move towards supporting rich and diverse offerings that mirror more traditional retail sectors. Finally, they are also engaging with wider relationships with third parties in the form of content and application owners.
Against this complex backdrop, billing and revenue management must be seen as complementary strategic functions to the transforming activities outlined above. As triple and quad-play service portfolios grow and evolve, these will play ever more important roles in creating, bundling, and rolling out services, charging for service consumption and collecting revenues.
The crucial thing to recognise here however is that what is currently known as 'bundling' will actually evolve to a concept that should better be known as 'blending', where the billing system will need to additionally track a single service such as voice – delivered to a single number – but which is actually accessed across a variety of different devices and network technologies such as DSL, WiFi and GSM. Compounding this complexity still further, the billing and revenue management system must be able to track and share call minutes, discounts and promotions across all these different devices and delivery mechanisms, charging for these in rational and cohesive ways that make intuitive sense and deliver value to the end customer.
Problematic issues
It's in the addition of video to the service mix that the most problematic issues arise. IPTV and broadband video will drive the need for far more robust revenue management principles and real time interactions with the network because of the inherently interactive and dynamic nature of the services supported. Any billing system handling video in all its different forms has to be able to move away from the usual 'one size fits all' model of flat-rate subscriptions for a number of reasons:
• Both user and service provider need to be able to experiment with pricing for different services such as Personal Video Recorders, video chat, video calling and so on.
• This environment is also going to be characterised with experimentation across different advertising and sponsorship models, including on-the-fly real-time advert insertion driven by user preferences or specific time or location sensitive promotions.
• Support for these new models must be delivered in granular, component-based ways to enhance the freedom to experiment with micro-bundling, cross-selling and hybrid charging models.
• This dynamism must also extend to interactions with the new supporting middleware and devices like set-top boxes to enable cost-effective customer self-service.
• There must be complementary flexibility in the return revenue path to the actual media and advertising partners involved in each particular service.
While most of the cable sector remains firmly set on the subscription model – even though recent research indicates that a firm majority of US consumers prefers an á la carte model – telecoms service providers can choose to move towards more micro-bundling and á la carte services. This will necessarily involve the need to support much higher volumes of per event charging – problematic for the highly traditional billing systems of cable companies, but less so potentially for those coming from the telecommunications space.
Exact requirements
With these factors in mind, what exactly are the requirements for a triple or quad-play billing and revenue management system ?
Firstly, it has to be truly real time in nature and able to rapidly integrate with the network and adapt easily to interworking with new network components such as IPTV middleware and Video-on-Demand subsystems. Support for a SOA strategy and standard charging interfaces via IMS will also help speed time to market for new services as well as help standardise the wider processes involved in rolling out services and charging and billing for usage. The ensuing efficiencies across a broad range of business processes will also contribute to lower system integration and operational costs.
A billing system should also enable extremely short product and service development with constant replace and replenish lifecycles, supporting the experimental paradigm that is central to taking the first steps into what is still comparatively unexplored territory. Speeding up the ability to rollout, test and measure the success of services – without a huge upfront investment for each individual service – is another key differentiator for success in this area.
There's also the partnering domain to consider. A telco's revenue management platform should support the management and settlement of accounts with content partners whether they are aggregators, distributors or local content owners and users themselves. Since initial subscriber counts will be low, service providers need flexibility in how they pay for distribution rights – and for related deals with complementary media such as traditional radio/TV and advertisers. Royalty and settlement contracts are still evolving in this area and no predefined models yet exist that are mutually satisfactory to all parties.
In this context, it therefore becomes essential for service providers to be able to track very accurately what precisely their customers are consuming – irrespective of device or distribution medium. In the US, for example, Verizon has to pay CBS on a per subscriber basis via their IPTV offering for content that is normally distributed free-to-air (although paid for by advertising) over terrestrial TV. Unless a billing system is operating in true real-time fashion, tracking and auditing this type of content can become a logistical nightmare with heavy financial penalties if things go wrong.
Finally, irrespective of the history, traditions and ambitions of the service provider, they must structure their billing environment with an ever-watchful eye on the unknown – and ability to respond to rapid change and customer demand across a number of different areas. For example, once cellular/WiFi dual-mode handsets become more widely available, what will be the optimum pricing and charging models for wireless calls? Will the billing system be able to readily readjust to different charging rates as a call moves from cellular to WiFi and back again – particularly if roaming with third parties is involved? And what happens when we add content downloads to that service mix – where there might be different regional DRM issues in place?
The harsh truth is that our customers are increasingly becoming agile users of communications and content services themselves as they navigate between different media, devices and technologies to stay in touch with their friends and families, grow communities and view and share content. Unless we can complement their agility with our own in our back and front offices around the globe, then we'll be relegated to the position of perpetual wall flower while other more aggressive and dashing competitors take the lead. •
Bhaskar Gorti is General Manager of the Communications Global Business Unit, Oracle/Portal.
www.portal.com
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