The Book of Billing for Telecommunications

The Book of Billing for Telecommunications

© Jonathan Hart - PBI Media Ltd 2002

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The Book of Billing for Telecommunications

The Book of Billing for Telecommunications

- A Billing Primer

© Jonathan Hart - PBI Media Ltd 2002

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The Book of Billing for Telecommunications

A Tarifica Study published by: PBI Media Ltd 3rd Floor 19 Thomas More Street London E1W 1YS United Kingdom Tel: +44 (0) 207 423 4500

Fax: +44 (0) 207 423 4501 Email: billingconsult@the-phillips-group.com Web: http://www.billing.co.uk

Researched and written by Jonathan Hart ISBN: 1- 903733-23-5

© All rights reserved. No part of this publication may be reproduced in any material form (including photocopying) or stored in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication without the written prior permission of the copyright owner. Application for the copyright owner’s permission to reproduce any part of this publication should be addressed to PBI Media Ltd, 3rd Floor, 19 Thomas More Street, London E1W 1YS, UK. Every effort has been taken to ensure the accuracy and completeness of information presented in this report. However, PBI Media Ltd cannot accept liability for the consequences of action taken based on the information provided.

© Jonathan Hart - PBI Media Ltd 2002

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............................4............3.... 18 1......................................6 Customer Service Focus......................................... Products and Services.................................................................................................................3...2........................ 17 Forecasting...............................1.....................................................................................4.................................3....................................................1 The Business Processes of Billing 21 Why Talk About Processes? ..................................2 1..................................................3 1...................1 2.....3.....................PBI Media Ltd 2002 .......................... 13 1.........................................2 1 Introduction 11 About this Book ...............................5 Resources and Expertise ................2......................1....................3.......4 1...3.......4............................2...................................4 Retail Billing............. 26 Recurring Subscription...............................................................................................................5 1...............3............... 13 New Technology........ 15 Internet... 17 New Technology Licence Costs .2........... volumes........................... 27 2...............3 1.........4 Setting Up Customers & Managing Orders............................................1 2.............3 2..................................2....................................... 13 Growth....................................................... 27 Making a Call..............................................2 Billing ........................ 21 Strategy and Process Definition .......................................................................... Access Fee or Rental........................2 1............................................................... 14 Interconnect Agreements .................4..2 Challenges for New Entrants................................................ 19 2 2.........................3 2..............3................................................................................................................. 31 4 © Jonathan Hart .................................................................................................................... 12 The Telecommunications Business.......... 19 1......................... 26 Billable Events or Usage Charges.......................4.........2 1..........................................................................................4...1 1....................3.................................................. 31 2.. 15 Convergence...............................................................................4.....................................4..............3...... 18 Technology changing faster than plans allowed......................................................................1 2....... 25 Service Activation............3 2....................................................................................1 1.......................... 12 Deregulation and Competition................................................................................... 21 Process Maps Provide Information .........2 2..2 2...........................................................1 2.....2.............................................................................................................. 18 Creditworthiness vs.......................................2 1................3 1.... 11 What is so-o-o-o Interesting About Billing? ....2...........................................................2 2............................................................................1 1................3................................ 13 Mergers........................... 18 Customer Service Considerations .............................4 1..........The Book of Billing for Telecommunications ContentsThe Book of Billing for Telecommunications 1 1................. 12 Massive Rate of Change......................................................3.......................................................................................................... 19 Flexibility and Scalability....... 17 Choice of Platform.....................3................. 22 The Need for Business Rules .......................................... 23 Order Management ....1 1........................1 1.......4.......4...............1 1................3 Credits.........................3............................................................................... 18 1..........4 System Selection and Implementation ..........4.........2............................................... Disposals and Acquisitions......................... 25 Fulfilment .1..................................... 25 Billing Accounts............2............................................................4....................................4.. 16 1..................................................... 26 2....................1 1................................2 1.........................................................................................2..................................3 Customer Acquisition ............................3........... 19 Requirements Definition ............................................... Products and Services ........................................................................................ 23 2..............

.................... 44 Premium Rate Services Fraud ..........7 2...................................................5................................................2 Billing Systems and Billing Data 47 System Components ....6.............2 2................................... 47 Billing Data Sources .............................................................2 2........8...............................................................................................4...................................................... 39 Interconnect for Wholesalers .......................................................... 38 Resellers and Virtual Carriers ....................2 3..........2 2.......................... 40 Collections ......... 39 Quality of Service Billing .....6 2......................The Book of Billing for Telecommunications 2......3 2.........................................7 Wholesale Billing ....................................4 2.......8...................................................6 2......................................................................................................... 31 Cycle Billing ................................................................8.............................. 44 2...................................1 2........................1 2.........2 2...................................................................1 2...................... 36 Direct Settlement ............... 45 3 3........................2................................................................1.......................................................2.......................................................................................................................................................................... 33 Interconnect Rating ..............5 2......................................7.........................5.....................................................4 Revenue Assurance ............2 2...2...6 File Controls ......2... 38 Basis for Billing Wholesale.............3 3...................8.....................8....... 49 Product Pricing Reference Data..............8 2....................................3 Restricting Access.................. 36 Indirect Access to Our Network.....3 2.....1 3...................1 2........................................................... 41 2........................... 43 Fraud................4..................5.............. 40 Accounts Receivable......PBI Media Ltd 2002 5 ...........................................2........2........ 40 The Cheque Was In the Post .......................... 49 Customer Account Data ...............................6................................ 35 2............................5.................1 2.........................4.............5............................................4 3................................1 Interconnect Billing and Settlements ..2 2............... 34 Interconnect Rating Factors ....................................................................................... 52 3.......................8........... 38 Wholesaler’s Retail Billing.....................................2.........................................2......................1...................................................... 34 Least Cost Routing...................7................... 39 2...............................................4................ 45 Process Controls.....................8.................................................................................................................. 50 CDR Generation............. 41 The Causes of Revenue Loss .........................................3 2........... 36 2........................................................................................................................................... 43 Subscription Fraud ....... 35 Cascade – Incoming or Incoming Transit .............................................6...... 41 2... 42 The Objectives of Revenue Assurance ............................1 3................. 32 2.........5.........5.. 51 Recurring Charges .................................7........ 42 Validating Accuracy.................................................................................................7.............................................................................................1 2.......5 2................................................................................. 40 Automated Collection ............................Outgoing .................................................. 50 CDR Stacking and Collection .................................2 Accounts Receivable and Collections ...........................................................................2 Direct and Cascade Settlement........................................... 37 Indirect Access and Calling Cards .....................................................................6................................................................................................................................................8............................................................................1 2..........................................................................7......................... 31 Bill Production ..3 Historical Billing Methods ...........4.....................2..................................................................................5 2............................................................... 36 Cascade – Outgoing............6........................2 2..5 © Jonathan Hart ..............................................2............................................6...............6.......................................................................................................................1 2.............................................

...........................................................................4...............................2......................................................3 Mediation ...........1 3.........3 3................................................................2..3....................3 3............7.........4 3................................................................................5 3..................................................................................... 66 © Jonathan Hart . 64 Interconnect...... 63 3.......................... 54 Rating................. 61 Tiered Discounts ......................... 60 Bill Production ........... 64 Interconnect.............. 63 Billing as the Differentiator ...........2 3.2 3.............................................................................................................................2 3........................................6................................................................4............................................ 62 3.4....................................................................................................................4................................................................................................... 66 “The Cheque Is In The Post”....2.... 62 Free Usage........4 3.............................................................................................................................. 64 3..................................................8..1 3..........2..........2 Retail Billing......................4............................................... 52 3................................................. 62 Other Discounts................2.7..5 3...............................................8.......... 63 Interconnect ....4 3..3...........6 One-Time Charges and Credits .....................................7............................. 56 Other Usage Events ..............................................3 3.......................................................................................................................................................................................1 3........................................................................8...................... 63 Reconciliation Estimates ...............2..................................................5 Rating Discounts .....1 3.........................Incoming and Transit .....................................................................................................................................................................................1 3..5 Accounting and Collections ......... 59 3.......... 53 Validation and Re-formatting........................... 60 3......8...........................1 3................ 64 3...........................................................4.. 53 3.................................5.......................................1.......................4 3..................................Outgoing ............................1...5.............6....................................................................6....................................................................................................... 55 Data................................ 62 “Friends and Family” ....................... 66 Pre-Paid Services .................6...............................................2....3 3..... 62 Tapered Discounts .........................................1 3..............3.......6... 59 Controls..............................................................................1...............2 3... 58 Pre-Paid Service Rating...........3 3............................ 58 Split Rating ..................4 Bill Formats & Messages .........1 3.................................................................................................. 60 Aggregation and the Bill Pool.....................................5.................6.2 3.........................................4....6...........................................4............................................. 65 Accounts Receivable and Remittance Processing ........................................................................................ 58 Regulatory Issues .............2 3............................... 56 Applying Rating Factors . 54 Guiding and Account Identification...............................................................3 3......3 3....................................4.................................. 65 Exceptions ......................5 3.........PBI Media Ltd 2002 6 ............................................................................................................4 3........................................................................................................................................... 58 3..................................................................................................2 Rating and Pricing .............. 60 Billing Discounts..................................................8.................6.................. 53 Selection and File Controls .2.1 Wholesale and Interconnect Billing System .......................6................................................................................................................................................................... 66 Bad Debts ...2.........8 3..............................................................................................................7 3............................................... 59 Billing Cycles.... 53 Consolidation and Duplication: Mediation Rules ..................2 Wholesale ............3 Billing and Invoicing Operations .....7......2.......................................................................................2.The Book of Billing for Telecommunications 3..............6 3....4.........7....................... 57 Rating Table Dimensions ..........................................................................................

......... 68 Order Management .....................................................................................3............................................... 88 6 6......................................2 Build ..... 81 Advantages ..........................................4 4............3..........................5............................1 4................ 75 Operational Reporting ........................3 4............. 85 Migration Projects................................1.................................................2..5 5....................................................................................................................................................................................... 67 4 4.........................The Book of Billing for Telecommunications 3......................................... 82 Advantages ....1 6...............................1........................................... Build or Outsource? ............. 79 Buy.................................................................................................................... 91 © Jonathan Hart ...................... 81 5................3........................... 75 Churn ................3 Choosing and Implementing a Billing System 78 Billing Only.........8............................................................................................................................2 4...............................................................................................................................3..............................................................3............................. 81 5................1 5............................ 70 Problem Resolution.................................... 87 Permanent Staff .....................................................................................................................6 4...................................................................... 68 Billing and Accounts Enquiries ....8.................. 80 Disadvantages...................................................................................................2 5...............2 5..................................... 74 Reporting and Management Information......................3..............................3................... 69 Complaints and Fault Management ..............................................6 5.........................................2 5............3 Resourcing .................3................................2...1 Planning..........................................................2 4................................................4 4.................................................................................1 Other Systems That Interact With Billing 68 Customer Care and the Call Centre ..... 82 Disadvantages...........................3...........7.......4 5......1..........................................1........3 4.................................1........................................1 5....................5 4.......................................................1 4...............................................1 5...................................................................... 75 Data Warehouses and Data Mining .............................................................................................. 71 Product Management ...........................................................................................................2 Recent and Emerging Changes in Billing Practice 90 Electronic Bill Presentment and Payment (EBPP) ......... 83 5....... 70 Customer Changes .......................................5.............................................................................................. 71 4..............1 5...... 90 Customer Self-Care........................................ 76 5 5.......................................................................... 78 Requirements Definition ...3 Outsource .....2 4............3 Call Centre Systems..........................2 5...2 5........................... 88 Contractors .................................................................................... 69 Contact History............................................................8 5........................... 88 Consultancies..............................................................................3...................................................................................................................1 5........... 86 Data Challenges.....................................................................5 4......................................................................8................. 84 Acceptance Criteria .................................................6 General Ledger ......... 80 Buy.....................1.............................. 72 Service Activation .5..................... 83 Testing.................................................................................... 81 Disadvantages.........1 5..................................................3.........................................................7 5....................................................................... or Something Wider?................................................................ 80 Advantages ................................................1.................8................................. 86 5.................................................PBI Media Ltd 2002 7 .............................1.................................

. 93 Billing for Internet Services.....................................3......................... 94 Quality of Service Pricing ....................................................................................... 97 Appendix: Glossary of terms Billing and CRM Reports...........5 6...................2 Hot Billing and Real-Time Billing ................................................. 91 Hot Billing..................................... 96 The Impact of Commoditisation................. 92 6.........................3............................................................................................ 93 3G and UMTS: Charging for Content .................................................. 92 (Near-) Real-Time Billing......................PBI Media Ltd 2002 8 .......................The Book of Billing for Telecommunications 6..... White Papers and New Services © Jonathan Hart ..4 6..........7 6......................................................................8 6..... 97 Reducing the Cost of Billing ...................................3 6.........9 Billing Convergence and Integration .........................................................................................6 6........................................1 6...............................................................................................................

The Book of Billing for Telecommunications List of Figures Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 Figure 13 Figure 14 Figure 15 Figure 16 Figure 17 Figure 18 Figure 19 Figure 20 Figure 21 Figure 22 Figure 23 Figure 24 Figure 25 Figure 26 Figure 27 Figure 28 Figure 29 Billing’s boundaries New partnerships Primary business processes Interfaces with billing The order management process The billing process Making a call – 1 Making a call – 2 Making a call – 3 Making a call – 4 EBPP – thick consolidator model EBPP – thin consolidator model Interconnect settlements Wholesale connection scenarios The role and scope of revenue assurance Example – premium rate call fraud Components Architecture Customer hierarchy Rating voice and data Simplest rating example Discount schemes The collection process Product management process Principle of the Selection Process Outline implementation programme Programme plan Basic Internet charging UMTS role model © Jonathan Hart .PBI Media Ltd 2002 9 .

I agreed in principle . in that it covers issues from wholesale billing to billing for content...” He is right. I would recommend this book wholeheartedly to those who want to understand the processes and systems that lie at the heart of the world of Telecoms Billing. for two reasons: 1) I would have to read the book 2) I would have to be honest about a book on Billing I made some time.. It explains complex issues very well...... Alex Leslie Executive Director Global Billing Association © Jonathan Hart .. It is comprehensive. It is very easy to read. I will be honest. my heart sank. and to be a primer to the training course in billing fundamentals. or as a great starting point for newcomers who need to be trained in this complex subject.The Book of Billing for Telecommunications Foreword Let’s face it . asked me if I would consider writing a foreword for a book he was writing about Billing for Telecoms. from interconnect agreements to CDR stacks. from customer service issues to EBPP. When he emailed me the final proof.The book is intended to help the reader understand the process of Billing. If it was. I read the book.largely because I have known Jonathan for a very long time in ‘Billing Years’ ... who have some business knowledge (maybe from another industry).. and very clearly. the components of Billing and how they fit together. the author. from specifying a system to revenue assurance.six or seven in real years and I was fairly sure that he would do a good job.a book about Billing is not something you would expect to see in the Bestseller List at airports.. When Jonathan Hart.PBI Media Ltd 2002 10 . you have to wonder who the hero would be. If there is ever a bestseller list for Billing books. together with a gentle reminder about my promise to consider writing a foreword.. some understanding of information systems (but not necessarily programming).. this may well be at the top. In his introduction Jonathan says: “This book is aimed at readers who are perhaps new to telecoms.

the components of Billing and how they fit together.1 Introduction About this Book This book is about Billing. 1 Billing’s Boundaries Product Management Promotions Customer Service Billing Preferences Network Usage Accounts Billing Events Billing Collections Fault Management Fraud Management Interconnect Data Warehouse Marketing © Jonathan Hart . some understanding of information systems (but not necessarily programming). It is not about accounting (except where billing interfaces with accounting). systems and data to make Billing work correctly. It describes what is needed in the way of processes.The Book of Billing for Telecommunications 1 1. and to be a primer to the training course in billing fundamentals developed and delivered by the author. the reader might be familiar with billing in other businesses and seeks to understand the differences in billing for telecommunications services. This book is aimed at readers who are perhaps new to telecoms. The book is intended to help the reader understand the process of Billing. who have some business knowledge (maybe from another industry). how Billing works. nor is it about telecommunications (except where use of telecoms services generates a primary input to Billing). Alternatively. Fig.PBI Media Ltd 2002 11 . what happens at each stage in the end-toend billing process – and why.

2 What is so-o-o Interesting About Billing? Primarily. As a result of the massive growth in the global telecommunications marketplace. The typical telecoms enterprise is incredibly dynamic and fast-moving. opening up each market for private investment and competition. This usually involves the sale of at least a part of the incumbent operator and the establishment of an independent regulator to ensure that new entrants are entitled to fair competition against the incumbent. In practice. Not a dry.2 The Telecommunications Business Many of the daily challenges faced in Billing arise from the telecoms business environment that billing is trying to serve. and has its own professional associations. but the net effect is one of constant change.The Book of Billing for Telecommunications 1. It receives enormous attention and investment. If one acknowledges that the colossal global turnover of all telecoms companies has to be processed through some form of Billing. Thus in most countries the situation has changed from a state-owned monopoly telecoms operator to competing privately-owned operators and service providers. Billing is always expected to be able to send a correct invoice for the latest product variation to the customers using it. stages a plethora of conferences on esoteric topics. in one form or another. Billing has to cope with all of those changes. the range of platforms used. 1. gaining the large injections of cash from sale of the PTT and obviating the need to provide massive investment capital to bring telecoms infrastructure up to an appropriate standard. Billing can be seen as more challenging and multi-faceted. it employs hundreds of thousands of billing professionals within thousands of specialist companies. constantly changing products and services as each operator or service provider seeks to offer more benefits to prospective customers than its competitors. it provided an opportunity to establish competitive high quality digital networks to service and enhance commerce and industry.2. Billing has become an industry in itself. several times yearly and across the world. The telecommunications marketplace is tremendously competitive and dynamic. There are a number of reasons for this. at the same time creating the profession of Billing. then what might otherwise have appeared to be a dry subject is put in perspective. 1. requiring many and frequent changes to products and services in order to remain competitive.1 Deregulation and Competition Over the last decade or so there has been a near universal move to privatise nationalised telecoms services. If one then applies all the variations in product and service pricing and discount schemes. Hence telecoms billing is in a constant state of change to keep up.PBI Media Ltd 2002 12 . back-office industry. and often with little or no advance warning. extended by the billions of telephone connections made hourly. some of which are discussed below. the purpose of Billing is to enable an enterprise to invoice customers correctly for the products and services they choose to use. © Jonathan Hart . It would be politically incorrect to suggest that the situation simply benefited the government concerned.

1. Hence.3. and it involved massive advances in technology. Then the service differentiator was likely to become more creative pricing.2. and so on. consolidation of the workforce and a bigger customer base – as well as eliminating at least one potential competitor.2 Growth From an incumbent’s viewpoint. to expand the market and attract new customers – in short.1 New Technology. the wise strategy was to increase the range of products and services on offer. the batteries didn’t last long enough and reception was patchy. corporate activity is frequent. For the resulting new corporation.2. smaller and more dependable handsets. 1.2 1. interconnection of networks. In the telecoms marketplace.2.The Book of Billing for Telecommunications 1. Disposals and Acquisitions The scramble for market share and revenue leads to a host of inter-corporate activity. consolidation of whole customer databases and the revision of processes and operations. product bundling or attractive discount schemes – all of which depend entirely on facilities provided from Billing. to increase the size of the pie. For Billing. This meant Growth. the same merger usually triggers the migration of billing systems. © Jonathan Hart .1 Massive Rate of Change Mergers.PBI Media Ltd 2002 13 . Products and Services It didn’t take much arithmetic to calculate the potential revenues from a deregulated telecoms market: all businesses and half the population would need or want to subscribe. so Billing is always kept busy. to prevent a loss of revenues. whereby companies seek to gain some form of extra advantage.2. Competitors developed new technology to attract customers to a better transmission network. wider coverage.2. opening up their monopoly market to competition could only lead to a loss of market share. to having a slice instead of the whole pie. New customers were attracted to the new mobile services. until the playing field became more levelled and there was less perceived difference between service technologies. only to find the handset was heavy. production and delivery techniques. All that development was designed to entice the customer to change service provider. a merger implies a combination of rationalisation of products and services.

PBI Media Ltd 2002 14 . few do not. These have to be negotiated to enable service delivery over wider geographic areas and provide a fuller menu of product features to attract the customers. Spurned or ignored customers are ready and willing to move their allegiance to your competitors. and stimulating additional usage by existing customers. and so on. Growth in the global market implied a need for the players to forge new business relationships – not just with the banks and financiers. It also means that if the CSR needs to grant a credit to a customer’s account it can be achieved promptly and will be presented on the next bill.The Book of Billing for Telecommunications Growth meant adding whole new ranges of customers. Fig. along with any number of others who experience the same or hear of problems. For Billing. Growth came from those customers by adding whole new networks for mobile telephony. video conferencing. but new partnerships. At the very least. © Jonathan Hart . because customers now expect timely and accurate delivery as promised. How many of us had a mobile phone 10 years ago? 5 years ago? Now. That is growth . courteously and informatively. appointments kept. private voice and data network services. new products and new features to older products – such as call forwarding and voicemail. a customer service focus means that invoices must be complete and accurate.and Billing has to be able to send correct invoices to all these new customers for the new service usage. 2 New Partnerships Fraud Prevention Pool Interconnect Partner Credit Bureaux Independent Service Provider Reseller Telecom Operator Corporate Customers Residential Customers Roaming Partner Content Partner Banks Credit Card Organisations 1.3 Customer Service Focus The ferociously competitive environment means a real need for high-quality attention to the customer instead of indifference. and many have several. and small business and domestic data services such as ISDN and the emerging high-speed xDSL connections. services available to the standard advertised. all ordered services must be billed on time and at the agreed price. Gone are the days when “customer service” meant “the subscriber can wait until it is convenient for us”.2. and the Customer Service Representatives (CSRs) can respond to enquiries promptly.

came the need for many more agreements. there is a cross-charge raised from the receiving company to the sending company for making the connection possible. fixed and inflexible. mostly at a national level with country neighbours. Consolidating the billing of these different services from different billing systems is known as ‘convergence’. agreed and settled. Invoices might be for mobile. Operators now demand auditable accuracy in accounting for interconnection charges and revenues. Interconnect settlement was an almost informal procedure. The volume of traffic passing in either direction was estimated. Smaller carriers owning segments of a strategic high-traffic route could find they receive good revenues from transiting or terminating calls as well as from their own customers. calling cards and various types of data services. the interconnect charge rate between a given pair of locations was fixed for long periods. It is now accepted that interconnect charges can amount to as much as 40% of controllable operating costs. the sending company charges their customer.2. fixed line. Naturally.5 Convergence Until a common billing platform is established. mergers or acquisitions can lead to customers receiving several invoices from the one provider for each of the different types of telecoms service that the customer used. usually annually.2. carriers – whether established companies or new entrants – have to organise typically over 100 agreements from the start of operations.4 Interconnect Agreements Many connections or calls originate on one network and terminate on another.billing. This was enshrined in the ‘accounting rate’. In many cases. published and rarely changed. such as international calls or calls from one carrier’s fixed line to another’s mobile. Whenever a telecoms connection is made from a customer of one company to a customer of another company. for carrying or terminating the call1. With the increase in private ownership and in the number of carriers. this raises the need for commercial agreements between network operators to cover interconnection service levels and charges. there was only a need for a few high-level interconnect agreements. and almost on a gentlemanly basis – but those were days when settlement was as much a diplomatic event as commercial. Many agreements were set up as part of a strategy to provide controlled-cost international pathways between high usage and high recipient markets. the charge applies in reverse if the connection is made in the other direction. owning the whole route means the owner gets to keep all the revenue – and at their competitors’ loss. or by enabling one billing system 1 See also: Interconnect Q & A in Billing Magazine 2002 editions at www.The Book of Billing for Telecommunications 1. After all. since few billing systems paid any attention to it. 1. As a result. In the past.uk © Jonathan Hart . and the receiving company quite reasonably demands a part of that charge for the use of their network. and that justifies better precision and information quality. and certainly imprecise. This means they might become targets for acquisition – after all.co. when carriers were mostly government-owned PTTs. the art of combining the detail into a single invoice per customer per billing period. The PTT would arrange 10 or 20 or so. Convergence can be achieved by collating the outputs from the different billing systems before the final invoice production stage (so-called ‘electronic stapling’). Since no single company owns all of the networks.PBI Media Ltd 2002 15 . What makes interconnect even more challenging is that an operator’s greatest competitor may turn out to be their best customer.

There are issues of CRM. billing for access and usage of data. The market is still unsure whether to converge billing for widely differing product types. chat lines and newsgroups. and is discussed later in this volume. Raising many invoices might be inefficient for the provider and inconvenient to the customer. making the call ‘free’ to the customer.6 Internet One of the latest billing challenges – and as yet not fully resolved – comes from the Internet. by the consumer’s desire for instant information and convenient e-services. offset by advertising revenues. particularly if the customer is entitled to cross-product discounts. for example. although not many people are willing to admit it to be a driving force. on a simple connection to the ISP’s point of presence. The content billing usually amounts to a standard external credit card charge. etc). voice and added-value services (conferencing. or an item purchased from a catalogue. even where there is only one company acting as provider. the published material such as music or movies delivered over the same telephony connection. since the download of free material cannot easily be distinguished from purchased files. This can be quite a complex operation.2. From the carrier’s billing viewpoint.PBI Media Ltd 2002 16 . 1. mandating every business to have a marketing website and an e-product. vast amounts of information. What remains unresolved is how to identify customer transactions with sufficient accuracy. This is an area the industry is currently developing. The vast demand for internet access is fuelled by a frenzy. the need arises to merge billing for all services on to a single bill. messaging. Hence from the billing point of view. power. as well as today’s horoscopes or recipes. to communicate from home. What is sought is a reliable identification method that 2 See: PBI Reports 2001: CRM to CMR – a paradigm shift in customer care. most of the value of an internet transaction is billed by the content provider or website owner. Marketing and Billing New Products – a winning combination. cheap long-distance voice calls. The situation is never purely black or white. Some ISPs absorb the call charge and refund the carrier. purchased or downloaded from a vendor’s website. This is partly because of the effect of a converged bill on the customer when they receive a combined invoice for different services. then convergence has wider implications than just billing. and the lesser value part is billed by the telecoms carrier or service provider for access by the customer to that content 3. such as television. electricity or water with telephony. gas or water. 3 © Jonathan Hart . access to customer database and cross-product marketing and support. When the provider offers other non-telephony services as well. The real value to the customer of the internet call comes from the content. the chances are high that the vendors (and the credit card company) will receive more revenue than the carrier or the ISP from the call. One must not ignore the burgeoning pornography industry.The Book of Billing for Telecommunications to cope with the different product types. internet usage represents a long-duration local or shared-cost call. See: PBI Report 2001: Re-engineering Billing for IP Content. Originally. from the material accessed. such as fixed-line and mobile. but it might also be simpler for the customer’s internal processes for invoice approval and payment. The discussion is more intense when converging bills for telephony with ‘content’. facilitated by secure transfer of the purchaser’s card details. Whether the content material is for example a music or video clip download. aptly known as ‘bill shock’. As customers increase the number and variety of services purchased from the carrier. to have cheap messaging by email. “convergence” encompassed ‘all types of telephony services’. thoughts of video streaming.2 Convergence is still a major discussion topic in the industry.

With limited time and by definition no current revenue stream. in order to maintain governmental control over the proliferation of competing services. whilst a major capital investment. if not. 1. except in a few countries. with larger numbers of customers paying smaller invoices for simpler services. The operation cannot proceed without network infrastructure. The effect of this investment was doubtless one contributor to the recent fall from grace of telecoms stocks on world stock markets. satellite or fixed line? Data or voice? And should the customers be residential. but there will be no revenues without Billing.1 New Technology Licence Costs In order to operate as a carrier or service provider. as investors question whether future revenues from 3G will yield the returns they desire in a reasonable time4. 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 Billing Challenge. 1.3 Challenges for New Entrants The biggest challenges face the new entrants. Hence. Setting up a cable-based network.3. but at least they can proceed without the baggage and old-established ways of the incumbent. does not involve as scarce a resource as the radio broadcast spectrum available for transmission of wirelessbased services. whether built or bought. the entire enterprise infrastructure has to be put in place. What kind of services. or acquire a company that holds one. a licence is required.The Book of Billing for Telecommunications will entitle the carrier to increased revenues from some form of commission. if available. Higher performance data networks may imply a team of sales people targeting bigger customers paying higher-value invoices. Often only a few months are available in order to complete the tasks needed to gear the operation up to launch the first products and services.PBI Media Ltd 2002 17 . not even for prepaid service providers 1. but these are more expensive to establish and the competition is intense. Hence all the challenges have to be faced up front. for what type of customer and in what numbers? What pricing model would be competitive – given the corresponding development and delivery costs? Are they to create their own network or purchase and resell capacity on an existing network? Mobile. Billing has to be able to match the needs of the business. small businesses or larger corporate clients? These choices have a major impact on the choice of operational methods and billing platform. Targeting smaller customers implies a retail operation. Competition for the newest licences (for ‘third generation’ mobile – known as 3G or UMTS services) in Europe and Asia was so intense that huge amounts were invested in the licences alone – even before any transmission network infrastructure was developed.3. governments tended to conduct an auction for wireless operating licences to ensure the best price was achieved for the bandwidth needed. © Jonathan Hart . in return for providing the connection that enabled the sale. A new operator has to buy a licence. Products and Services The new entrant has to set the strategy for their business. In practice.2 Choice of Platform. most providers end up offering a combination of services to a range of customer types. supported through a larger call centre.

in order to meet delivery promises. Normally this means that new customers are put through some kind of creditworthiness checking. Forecasting that sort of growth is not easy. This is done either using a credit agency (on a reference service) or by some credit scoring based on information gathered during the acceptance process. then it will need more supporting personnel – if only for the engineering installation service.2 Customer Service Considerations A new product or service needs some level of support from your business.3. but not if you risk cancellations and disgruntled customers.3.The Book of Billing for Telecommunications 1. whereby the ‘customer’ gives false details. Investors seek growth and profits.2. resulting in a growth that achieved five years’ business plans in under three years – and the growth did not stop there. 1. The Billing department was kept exceedingly busy upgrading their IT systems capability two or three times a year to keep pace – something ‘normal’ operators need to achieve much more rarely. Easier criteria or lower thresholds for entry mean that more customers will be accepted with possibly a higher bad debt rate. 1. never intending to pay. Operator-driven changes such as new delivery services meant that customers found themselves investing in facilities that were rapidly outmoded – rather like the explosion in personal computer price/performance that rendered equipment obsolete as soon as it was acquired.2. If exceedingly successful. to ensure (as far as possible) that they will probably pay their bill. 1. and harder criteria means less customers – and perhaps only lower revenues. in terms of customers and revenues. The business strategy may set out to achieve growth from zero to X over the first three years.3.2 Technology changing faster than plans allowed Another challenge is the rate of change of both fixed and wireless technologies. then the business will require larger numbers of CSRs and installation engineers.3. more revenue – and risk of more bad debt. Management of the new customer entry process is critical to limit the opportunity for subscription fraud. volumes The enterprise has a conflicting choice between accepting as many customers as possible and accepting a higher level of risk of bad debt and fraud. A nice problem to have.PBI Media Ltd 2002 18 . perhaps.3.1 Forecasting One of the key factors required for successful Billing is an understanding of the way data volumes are planned to grow over time. If it is successful. so that means continually increasing the number of customers and the services they use.3. but this is not always met. One way round this is to start out with web-based customer self-care and promote the © Jonathan Hart .3 Customer Acquisition The enterprise needs revenue. so the entry criteria have to be relaxed to get more customers. 1. This situation tended to have a greater impact on the operator’s financial plans than on Billing – except where the billing system or its components had to be upgraded. Customer-driven changes such as the massive improvement in usability of mobile handsets implied a rate of change of inventory as well as cellular transmission capability. One Italian operator had a famous market entry that took their market by storm – customers dissatisfied with the available services moved en masse to the new provider. These were investments originally planned to be spread over years. But investors are rarely satisfied.3. that now had to be revised into periods measured in months.1 Creditworthiness vs. so that means acquiring customers.

how the customer base is to be serviced and so on. Ultimately it means having enough billing capacity to process a day’s work in something less than a day. It is an important stage in developing the definition of corporate infrastructure – and some of the various considerations are presented in a later chapter. there was a global shortage of skilled telecoms and IT-literate human resources6.5 Resources and Expertise At the time of writing. large numbers of competent personnel became available. then there is flexibility. Provided that new products and prices can readily be introduced.4 System Selection and Implementation Which systems should the enterprise invest in? Estimating the needs of the business for the forthcoming few months has to be a trade-off between over-investing before revenues are there to demand (and fund) the facilities or sophistication. at the same time adding to the workload. so that when the customer phones up to ask something about his billing account the data is available in the database. If the systems can accommodate a number of customers and billable events way above or way below expectations. Each may be used for all or any of the system components. then there is scalability. if ever it will.2 Flexibility and Scalability If the new enterprise does not have a clear picture of the first months of operation. and the expected lifetime of the systems. ready for the CSR to view. Knowing these requirements predicates successful systems decisions. the business requirements for products and services. This led to another sudden set of changes – a drop in funding for new projects. but overall the demand remains high. have both until the situation stabilises.3. financial and human resources available. Also the sequel survey in 2001 at www.3. It means thinking about operational strategy.1 Requirements Definition The new enterprise has to make some progress in deciding what they expect IT systems to support. customer service means having enough capacity in the CRM systems to accept orders fast enough to pass details through to the billing system to set up billing accounts before billing is needed.4. 1. It also means having enough fulfilment and provisioning capacity to provide and enable the service before the customer becomes impatient. 1.globalbilling. fully processed.PBI Media Ltd 2002 19 . Billing & Customer Care Skills and Salaries Survey 2000. In some areas. buy or outsource5. pressure to reduce costs and downsize IT department’s and billing operations’ headcounts. There are three main types of approach to providing IT systems capability: the choice to build. 1. Develop or Outsource. then there inevitably has to be an increased level of flexibility in the systems that are installed. See: PBI Media Report: Telecoms IT. and the only prospect of the situation changing emerges from the downturn in telecoms stock prices. pricing and discounting. For Billing. Ideally.org (within the GBA’s Knowledge Bank section) © Jonathan Hart . according to the preferred IT strategy. before any technical or esoteric IT demands have to be evaluated.3. and under-investing that potentially gives overloaded system capacity and unsatisfactory performance. 1.3.4. 5 6 See: PBI Media Report 1999: Buy.The Book of Billing for Telecommunications approach as an asset – at least as the business grows there will be a lesser need for CSRs.

the enterprise was often not prepared to invest enough money and effort in attracting. Not straightforward. selecting and retaining key people from whichever source.The Book of Billing for Telecommunications The new entrant has three choices: to try to successfully attract high-quality permanent employees. no bills for months. Further. because the resource shortage meant that candidates were not always as qualified as they claimed. or to manage independent contractors. to rely on external resources from consultancies or vendors. The result has been a history of greatly delayed implementations. © Jonathan Hart .PBI Media Ltd 2002 20 . launches plagued with problems. appalling customer service – and regrettably often.

3 Primary Business Processes Marketing Product Management Change Management Network Management Order Management Resource Management Quality & Revenue Assurance Supply Retail Billing Legal & Secretarial Interconnect Billing Accounting Wholesale Billing Collection 2. it is simply that the pressures of time and resource overtake good practice in the rush to launch the new company. recognising as many business situations as can reasonably be foreseen. A number of key decisions will depend on the quality of the process definition – not on its level of detail. Why is it that so many new telecoms businesses do not define their processes first? Usually.1 Strategy and Process Definition One has to assume that the Directorate of a new enterprise has a clear picture of the way the company is to operate.PBI Media Ltd 2002 21 . Fig. It can also arise from a lack of understanding of the contribution of process maps to the consequent successful operation © Jonathan Hart .1. but on the amount of highquality thought that went into its preparation. service or product.The Book of Billing for Telecommunications 2 2.1 The Business Processes of Billing Why Talk About Processes? The whole point of having a process defined is so that management can clearly set out just how they want the business to be run. It sets out the tasks along with the business rules so that personnel can interpret and execute those tasks in a manner consistent with strategy. and this strategy has to lead the statement of what has to be done to operate the company that way. The process definition states the tasks that have to be performed at each step along the way.

In practice a compromise needs to be reached. In this way. the dependencies are highlighted – and billing can be seen to be at the heart of the company’s operations. It will happen when staff find they do not know how to handle a new situation that crops up unexpectedly. For example. © Jonathan Hart . whereby the processes are defined at a high level. thereby failing to meet the needs of the business which seeks to deliver service in a particular way. if the business wishes to offer customers access to facilities for ‘self-care’ via the Internet. 2. Knowing the process will help to clarify the interfaces between the various different internal business functions and the systems supporting them. as is often the case. a number of template process models exist for “standard” telecoms enterprises (some may even be found on the internet) and these can be used as a guide.The Book of Billing for Telecommunications of the business.1. it is better to actually deliver telephony services to your own customers rather than to have meticulous process definitions only to find that your competitors have signed up all the customers. the other way round. as to how the business is intended to function. it is inappropriate to select a customer care system that does not support web access. enough to give all parties a structure to work with. modified as necessary. information technology. such as quality assurance. After all. Having the process properly defined will provide a primary source of information to the company’s IT people in their selection of appropriate hardware and software platforms. less speed” applies in telecoms just as elsewhere. the map informs operations staff how to recognise each distinct business case (and what constitute exceptions) and the action to take in each case. The map will also provide information to personnel in other responsibility areas.PBI Media Ltd 2002 22 . as an activity in parallel with service implementation and as the customer base (and the workforce) grows. To help with this compromise. When presented with training. or that systems cannot cope. The adage “more haste. The detail can actually be filled in later. The IT systems should be selected to support the process – not. yet not in so much detail as to delay the operational launch. line management and audit. if decisions normally made when thinking about the process definition are ignored or neglected.2 Process Maps Provide Information The process definition is often documented as a map showing the sequence of process steps and responsibilities. they will end up having to be made in haste.

That’s why these rule definitions are important. These must be defined for each major interaction with a customer or prospect – for example: ! Which pricing and discount schemes may be offered to each type of customer? What threshold business value is needed before each level of discount is allowed? What rules apply to credit limits for each type of customer? Does that include the value of new orders. particularly while the customer is on the phone asking to change his order.4 Interfaces with Billing Product Managers Pricing and packaging Customer Care Orders Orders. problems and preferences Customers Service Activation Service activations and suspensions Call details and events Billing detail Invoices and credits Billing Usage and revenue information Marketing Invoice and credit details Payments Switches Accounts 2.PBI Media Ltd 2002 23 .3 The Need for Business Rules A significant contribution to the detail of process definitions has to be the specification of business rules. what pricing rules apply? ! ! ! If you have not pre-defined these rules.2 Setting Up Customers and Managing Orders Somewhere near the beginning of the customer acquisition cycle. an individual or a business entity changes from being a prospect ‘out there’ and becomes a customer. 2. do not expect your Customer Service Representatives (CSRs) to know the rules intuitively or to apply them correctly. is the customer allowed to request a “mix and match”. and if so. by the act of placing an order.The Book of Billing for Telecommunications Fig. outstanding unpaid invoices etc? What rules are associated with order cancellation? Is the customer allowed to change his mind without penalty? What if equipment has been delivered and the installation procedure is nearly complete? If your product range includes bundles or packages of grouped product components.1. The Order Management (OM) process includes capturing an order for a product or service from a new or existing customer and fulfilling their © Jonathan Hart .

to the delivery standard. brochures etc Delivering any items not requiring installation (e. timeframe and price agreed or promised. engineering planning and preparation © Jonathan Hart . So. making it possible for that customer to utilise the product ordered.The Book of Billing for Telecommunications requirements. including service delivery points or sites Selection of the most appropriate product and price plan to suit their requirements Setting out their order. The actual sequence of the individual steps in the OM process is generally less important than their completion.g. such as contract forms. handsets.. Fig. 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.5 The Order Management Process Capture Customer Details Product Management Select Product Take Order Set up Account Service Activation Collect Billing Data Fulfilment Network Provisioning For OM. 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 telecoms services. smart boxes) Account creation and activation ! Service delivery: • Site inspection.PBI Media Ltd 2002 24 . it is necessary to complete the tasks set out below.

the type of service and priority (if any). it is quite common for the fulfilment tasks to be outsourced to companies with specialist packing and mailing service facilities. After the customer is set up on the network. responding to an invitation to tender. or by completing a form from a brochure or website. Activating the customer thus involves telling the network management system that the customer’s calling number or account number is to be recognised. these steps are completed by sales representatives or agents. including welcome letters. for example. perhaps with a PIN. including field visits to the potential customer. Often. Of course in some cases a customer might seek to cancel or change an existing order. the efficiency of handling each unit becomes more significant. perhaps a formal proposal. there may need to be a number of additional business development steps.2. additional service management commands may need to be applied from time to time. 2. The activation may also involve setting up additional service features such as voicemail or call waiting. For high-volume residential services. off-network or international) are allowed. call barring (prevent calls from specific calling numbers) or exchange barring (block calls to certain exchanges or ranges of numbers). © Jonathan Hart . installing) Customer Premises Equipment Service activation Commissioning and testing Enabling their first use of your product or service. 2. so the process must allow for such events and set out what else needs to be done at that time. directly by telephone. it is customary to send some form of documentation.2.PBI Media Ltd 2002 25 .2 Service Activation The network (or the service platform) has to be notified that the customer is authorised to have access to and use the service.1 Order Management Residential or small business customers may be satisfied with placing orders by email or letter. 2. including for example. Then the authorisation parameters will specify.2. The service identification is typically the Calling Line Identification (CLI) that the customer uses. so the process will ensure the details of prospective customers who are progressing towards order completion (‘in the pipeline’) are notified to sales management for planning and control purposes. For corporate customers.The Book of Billing for Telecommunications • • • ! Despatching (and if necessary. such as service suspension or reactivation. copies of contracts and equipment operating manuals.3 Fulfilment After receiving the customer’s order. stock movements (if the CPE is taken from inventory) and perhaps preliminary surveys. If the service provision requires Customer Premises Equipment (CPE) to be fitted then the Fulfilment process will include scheduling site visits by installation engineers. The rules must be defined so the sales representative or CSR knows how to deal with each situation. whether or not premium rate or interconnect calls (long distance. Wherever there are larger volumes of customers with smaller orders. a demonstration or a pilot scheme. and to correctly advise the customer the costs incurred by the change or cancellation.

properly itemised.The Book of Billing for Telecommunications 2. 6 The Billing Process Use Service Collect Event Data Fraud Management Mediation Interconnect Wholesale Marketing / Data Warehouse Product Management Rating Set up Account Billing Product Management Marketing Bill Production Accounting & Collection 2. and checking credit card details can be done on-line. Billing has to add the charge to the invoice at the appropriate time.1 Recurring Subscription. their preferred method of payment and bank account or credit card details as applicable. but also simply as an ongoing revenue stream. Access Fee or Rental There is usually some form of recurring charge that is levied either on each billing cycle or at some other agreed period.PBI Media Ltd 2002 26 . This exists partly in order to recover the initial cost of providing the service to the customer.4 Billing Accounts One of the last preparatory steps is to set up an account for the customer. and finally preparing an invoice to convey the debt to the customer. © Jonathan Hart . a monthly line rental or a quarterly subscription. then calculating the price of each. This will require details of the correct address for posting invoices. for example.3.2. The process step is not complete until there has been verification of those details – sending a Direct Debit Instruction to their bank would elicit a negative response within a week or so if there was a problem. It also helps to underpin profits and cover equipment maintenance. access fee or line rental Billable Events or Usage Charges One-Time Charges and Credits Fig.3 Billing Billing is the process of gathering details of all items that are to be charged to the customer. applying any discount and calculating applicable taxation. 2. There are generally three types of charge: ! ! ! Recurring subscription.

For the purposes of this book. or directory enquiries. although the interchangeable term ‘Event Record’ is valid for the more generic billable event.The Book of Billing for Telecommunications 2. retrieval of voicemail messages. CDRs are generated by the telecoms network systems for every call.1 Making a Call The sequence of events in making a call is broadly summarised in the accompanying set of diagrams. © Jonathan Hart . engineering and technology involved in the network of the particular operator concerned.2 Billable Events or Usage Charges Since usage of the telephony service is rarely restricted to telephone calls only.3. The network is shown as a ‘cloud’. containing enough data for billing to work out how much to charge and to which account it belongs. pay-per-view charges may be levied per film or sporting event. representing all the complex connections.1 A Local line Switch B NMS polls switches to collect CDRs CDRs 2. the term Billable Events is used to refer to any event that consumes or makes use of the service for which the customer has to pay.3. even if it is provided at no charge.7 Making a call .PBI Media Ltd 2002 27 . When Party ‘A’ lifts the receiver. data file transfers and downloads. the connection is made to the nearest switch in the network.2. The key data required for Billing an event is usually known as the Call Detail Record (CDR). Fig. Usage can include calls. we do not need to disassemble the cloud much further. In cable networks.

all duplication of CDRs for a given connection is resolved. As the call is connected. When the CDRs are passed to Mediation. all the switches involved are all capable of creating CDRs. a CDR is created by the switch to await collection by the Network Management System (NMS). The switch determines the best routing for the call and directs it across the network to the called party ‘B1’.PBI Media Ltd 2002 28 .2 A B Alternative routing CDRs File transfer to Mediation Mediation Billing Regardless of the routing.The Book of Billing for Telecommunications The switch checks the CLI to ensure the customer is allowed to proceed and then receives the dialled number as a string of digits. Fig. © Jonathan Hart .8 Making a Call . depending on their current set of control parameters.

9 Making a Call . Along the way. the point of interconnection. our Mediation has to resolve duplication of CDRs. but at least one must be passed back up the chain towards the originator.The Book of Billing for Telecommunications Fig. ‘B2’.PBI Media Ltd 2002 29 . switches may each generate CDRs for use of the host network. Again. but those CDRs sent from neighbouring networks are most useful for interconnect billing.3 A Local line Originator B1 B2 Alternative routing Gateway Terminator CDRs File transfer to Mediation Mediation Interconnect Billing CDRs also sent to Interconnect billing Transit CDRs CDRs If the connection requires interconnection of networks. then our switch directs the call to the Gateway. © Jonathan Hart . The call may transit a number of networks until the terminating network is reached and the call routed to its destination.

and a copy is retained for interconnect billing by the roaming host. it broadcasts its identity to the nearest cell.10 Making a Call – 4 A Local line Cell B1 B2 Originator Gateway Terminator Roaming database CDRs Transit CDRs Mediation Interconnect Billing CDRs At a high level.uk © Jonathan Hart . the nearest cell transmitter first of all checks its local database to determine if there is a roaming agreement with the owner’s home network operator. When the handset is switched on within another host network. The resulting information is stored locally for billing convenience. generating one or more CDRs along the way. which registers the handset for position and checks the central database for validity of the handset owner’s account. Note that: roaming is the mechanism that allows a mobile customer to use their mobile phone outside their operator’s ‘home’ service area.co. the handset location and identity is logged. at least one CDR is sent back to the home network for retail billing. the same set of principles applies to Mobile calls. so the call can be correctly routed.The Book of Billing for Telecommunications Fig. The transaction involves a remote database check. Hence when A calls B2. If cleared. 7 See: Interconnect Q & A by Martin Browne. with the added complication of Roaming. Assuming all is well. then validity of B2’s handset has to be checked with the owner’s home network before connection is allowed. then the host checks back at the owner’s host network if the owner is permitted to roam and is willing to accept roaming charges. As before. Billing Magazine Jan/Feb 2002 – at www. Interconnect is concerned with delivering a call to another operator’s network7. If so. a call placed by ‘A’ is routed as before.billing.PBI Media Ltd 2002 30 . When a handset is turned on. If the called party ‘B2’ happens to be roaming on another network. a process that may take several seconds. both the home and remote networks know where B2 is at the time.

the operator was replaced by automatic pulse-dialled switching equipment and automatic measurement of call duration.4 Retail Billing The subject of retail billing covers the calculation of charges and raising invoices for enduser customers.1 Historical Billing Methods In earlier days.PBI Media Ltd 2002 31 . This will aggregate charges that have been raised since the previous bill.2 Cycle Billing In order to avoid processing all of the customers at the same time – traditionally at the end of the month – the workload is distributed over the calendar month. On the date set according to the billing cycle. 2. Customers complained of excess bills. Telephone and Telegraph” services). mainly by sampling (basically listening in) to see if a conversation was still in progress. Consequently. Later. This aims to offset the customer’s inconvenience. The Customer Service agent or CSR therefore has to have facilities to raise the credit.3 Credits If for some reason the customer complains about the service. The telephone operator (here meaning a person tasked with making the connections. and should be recognised on the next available billing cycle. The amount billed was simply the number of clicks multiplied by the prevailing unit rate. and wrote down the length of each call. and the billing system consequently needs to be able to present these credits or refunds. Very large customers or substantial users of capacity may have their own contracts.4. rather than an enterprise) was responsible for monitoring call duration. but retail customers are usually less concerned.4. telephony was provided by nationalised providers. setting pulses or ‘clicks’ at a rate given by the distance of the call or the number of switches involved n completing the connection. the process has to assemble all the accrued charges for each account billable on that date. as part of the next bill. to allow the distribution of billing by Operations personnel according to IT workloads. Billing comprised ‘counting clicks’ for the line concerned. In this category we tend to include normal domestic and small business customers (also known as Small Office / Home Office customers or ‘SOHOs’) and many of the medium to large corporate customers. such complaints were ineffectual as the onus was on the customer to pay. regardless. This was supported by telemetry. The amount charged to the customer for telephone usage was measured manually. 2. Unfortunately. These billing techniques still prevailed in some countries until quite recently. 2. to make the distinction. There are normally up to three types of charge: © Jonathan Hart . It did not matter that excess ‘clicks’ coincided with nearby repair work by telephone engineers making lots of clicks on the line – the customer still had to pay. but were ultimately thrown out by customer pressure – they were unauditable. each customer is assigned a cycle day or cycle number. almost universally linked to the Post Office (hence the acronym PTT. or disputes the charge for individual connections.3. The operator assessed the duration to the nearest minute or so. perhaps with their own pricing and discount plans – these are discussed separately under “wholesale billing”. separately itemised.The Book of Billing for Telecommunications 2. we may choose to refund their costs and/or give them an ad-hoc credit. mostly to no avail. Business customers may prefer end-of-period billing. for “Post. The manual records were processed by an array of back-office clerical personnel and somehow a bill emerged.

fixed set-up cost. etc Recurring Charges. or other rules. legislation in Europe generally still demands that the invoice itself is presented on paper. Either way. representing periodic access fees. the result has to be presented as clearly.4. and to be notified by email of the total. The most recent developments in this area note that customers are very often happy to access their itemisation data through a secure internet web site. any ad hoc charges for specific events such as equipment sale or initial set-up fees. there may be a discount or ‘included free minutes’ which has to be deducted if applicable. whereby the invoice is prepared and printed. In some cases the tax has to be computed for the total undiscounted charge and separately for the discount (or any other credits). usually involving e-mail. If itemised billing is required. it is less costly and more convenient for larger accounts for itemisation details to be presented on floppy disk or CD-ROM. 8 See: PBI Media 2001 Report: EBPP – The Market Opportunity © Jonathan Hart . and then within CLI if more than one calling number is involved in the contract. The era of EBPP (Electronic Bill Presentment and Payment) is undeniably upon us8. transactions or events.The Book of Billing for Telecommunications ! Usage Charges. quantity of data carried.3 Bill Production The final stage of this step in the process is bill production. but co-operative business partners are finding convenient ways round this. rates per product or service. Finally the Value Added Tax (VAT) or Government Sales Tax (GST) is computed according to the tax jurisdiction. usually sorted to present them by date and time within product or service. 2. ! ! For every account. usually in start date/time sequence within product. At the time or writing. then details of each chargeable event have to be listed. Billing will aggregate the charges. in the form of rated calls. Whilst traditionally it was presented on paper. depending on the relevant legislation. Depending on the contract or price plan. Charges are based on minutes of duration. subscription charges or line or equipment rentals One-Time Charges. completely and as accurately as possible.PBI Media Ltd 2002 32 .

operators are paid by their own customers to carry traffic wherever it terminates.The Book of Billing for Telecommunications Fig. After all.5 Interconnect Billing and Settlements Whenever a customer places an outgoing call or makes a connection that terminates in a different network. 9 See: PBI Media White Paper: Interconnection – Practical Guide to Interconnection in the UK © Jonathan Hart . but since they cannot charge another network’s customer. they charge the other network operator instead9.PBI Media Ltd 2002 33 .11 EBPP – Thick Consolidator Model ALL BILLING INFO BILLERS CUSTOMER CONSOLIDATOR Source: © PBI Media Ltd Fig.12 EBPP – Thin Consolidator Model FULL DETAILS SUMMARY INFO SUMMARY INFO SUMMARY INFO CUSTOMER CONSOLIDATOR BILLERS FULL DETAILS Source: © PBI Media Ltd 2. then an element of Interconnect billing applies. The other operator will expect to be paid for use of their network to carry the call part of the way.

For example. The total volume and value of calls may not be the same in both directions. interconnect has become a highly competitive arena. from interconnect partner to partner – between the same points and even for different periods within the day. and to which destination exchange or connection point.The Book of Billing for Telecommunications Similarly. The amount we have to pay the other operator to carry the call will depend on a number of rating factors. negotiated between operators whose networks are interconnected.1 Interconnect Rating Factors Rating factors will include conventional factors used by retail. in one direction or the other. Therefore the operational staff who run the interconnect billing system will have to maintain rating tables that change dynamically. except those that start and end on the same network and that do not transit any other networks on the way. 2. and so on. there could be many different routes to get there: perhaps A-B-C-E. who carried the traffic. There can be slightly bizarre outcomes – sending a call from Germany to UK. if a caller on network A placed a call to a dialled number on network E. and produces reports for calls sent to (or via) other carriers for reconciliation against invoices received from them. We also need to select other event records that are generated on our network for incoming or transit calls. 2.1. is subject to some form of interconnect charge.PBI Media Ltd 2002 34 . Firstly. The charge rates are set out in Interconnect Agreements. across which different networks. it is to be expected that the cost to operator A for sending the call to E will vary according to the terms negotiated between A and each interconnecting carrier. the call duration or amount of data carried and the quality or speed of connection. Unfortunately. to cover traffic in each direction.1 Interconnect Rating The complexities of interconnection mean that the CDRs or Event Records generated by our network have to be examined several times for different processing tasks. It is not distance that © Jonathan Hart . for example. The outcome is that every call or event.5. The rates will be updated from day to day. and the totals may amount to very large numbers. to calculate interconnect charges for billing the other carriers. However. we then select the subset of events that terminate on or transit across another network. for example. we (as an operator) might receive incoming calls that originated on another carrier’s network to terminate on our network. Given that each network is a different competitive entity. whereas the price (to the customer) will usually be fixed. we select event records for calls that originate from our own customers on our network for normal retail billing. This makes some aspects of interconnect reconciliation more than a little difficult. interconnect rates also depend on the routing used – in other words. might be routed via the USA rather than through France or Benelux. A similar situation applies in both cases if calls are carried in transit to another operator’s network. Of those retail event records. We will then seek to charge the other operator for the use of our network facilities. with any number of new rates and charge methods set between different pairs of operators. to calculate the interconnect costs – for reconciling the other carriers’ invoices. The interconnect billing process raises invoices to other carriers for terminating or transiting their calls.5. As telecoms capacity is increasingly sold on a commodity basis. partly because of this rapid rate of change and partly because they like to keep certain aspects of their operation confidential. so an Interconnect billing system providing appropriate functionality is needed to keep track. we do not always have all the up-to-date detail of costs beyond the neighbouring carrier. or A-D-E.

we may not be informed of the routing taken beyond the first. Two common forms of settlement (and several others) exist. payable even if the call is not successful from the customer’s viewpoint – the sender “pays for trying”. The common forms are Direct and Cascade. the switch will take into account the latest known charge rates in deciding the routing of a connection.1.PBI Media Ltd 2002 35 .2 Least Cost Routing To minimise the cost impact by careful call routing.5.2 Direct and Cascade Settlement The overall interconnect accounting process is also called ‘settlement’. 2. Wherever possible. Cascade Settlement is where the operator pays the first in the transit sequence. Direct Settlement is where the operator settles separately with each carrier involved in routing the connections. In many cases. for commercial confidentiality reasons. and operators generally use both. and so on. 2.5. so Cascade becomes the settlement of choice.The Book of Billing for Telecommunications matters with telephony. There will usually be a call set-up cost component. whereas the customer does not.13 Interconnect Settlements Direct settlement Cascade settlement © Jonathan Hart . Fig. as it were. switching systems are increasingly including a ‘Least Cost Routing’ (LCR) capability that permits interconnect calls to be routed in real time according to the LCR algorithm. it is cost – digital signals can be re-amplified a number of times without loss of integrity. they retain their agreed share and pay the next.

The Book of Billing for Telecommunications Other models exist. in order to reconcile their invoice when it is received. we will transit or terminate the call on our network.Outgoing When settling on a Direct basis. it is 30%-20%-20%-30%. 2.5. One is ‘Sender Keeps All’. depending on the extent of collaboration between interconnect partners. If that operator does not have the necessary interconnect expertise or billing software. on the questionable assumption that traffic in the other direction should be similar in volume. 2. when it involves four. we are calculating the amount we are expecting to be billed by the neighbour concerned. The first step of the cascade identifies the operator to whom we handed the call.2.2. 2. then provided a cascade agreement exists we will need to pay that carrier. This time. however.3 Direct Settlement .1 Cascade – Incoming or Incoming Transit For incoming calls. we need to know all the carriers involved in a routing.6 Wholesale Billing © Jonathan Hart . It is common for an added-value fee to be earned for providing this service. 2. we can use our figures as a basis for settling their account. to be able to apportion the revenue according to the rules for that routing. so the basis of charge can be determined from database details of our agreement with that operator. Where three carriers (including the sender) are involved. Use of non-standard rates is almost as common.2 Cascade – Outgoing If we are carrying the call in transit to another network.5.2. depending on the systems architecture and on whether the call originated with one of our customers. We generally use the CDRs we generate at point of exit.5. so we expect to receive revenue from our neighbour. a typical apportionment is 40%-20%-40% respectively.PBI Media Ltd 2002 36 . This reflects the importance of the originator and terminator of the call compared to the transit operator – perhaps less complexity or equipment involved. The cost is calculated and allocated to the interconnecting operator’s account.

quite conceivably.and of Host network Local line Indirect access Host network Wholesaler’s network Direct access Alternative called party connections Indirect Access to Our Network If the wholesaler has their own network. It may be that the wholesaler has negotiated bulk rates from us for themselves as a single company or in effect a closed user group. able to validate and route the traffic as well as generate their own CDRs – as we will. They might appear to us as a major user (perhaps a multi-national with offices worldwide) or as a reseller. depending on what is negotiated in the contract. What we bill the wholesale customer. and how. © Jonathan Hart . so again we may have to analyse that traffic for interconnect costs and revenues. perhaps between fixed points. In this case. These points are usually controlled by intelligent switches. They will at least require from us an analysis of their traffic.PBI Media Ltd 2002 37 .14 Wholesale Connection Scenarios Customer of Wholesaler . they will probably set up dedicated points of access for interconnection with our network. with or without a margin. They might then choose to bill their own internal cost centres as a cross-charge for telephony usage. selected out from the total traffic. our network will provide some element of bulk or long-distance support for the wholesaler’s operation. wholesale billing). Normally a data feed of CDRs is required from the wholesale billing system. The wholesaler’s traffic will include interconnect. Fig. so the reseller can perform his own analysis and as input to their own retail billing (or.The Book of Billing for Telecommunications Wholesale billing means that we contract to provide another company with bulk use of our network. at the coincident points of access on our network. will depend on how their customers access and use our network as well as on the wholesale contract.

or a fibre pair of an optical cable). usage is often not considered relevant. to the wholesaler’s point of access. for example: ! ! selling bulk minutes (often over nominated routes) for competitive retail sale selling data capacity. The functionality to support this is often provided at the switch. and provide a file of CDRs to the wholesaler as part of the billing detail.6. For the Calling Card model. 2. satellite transponders or fixed transport capacity). Instead. the caller uses ‘last mile’ access to reach the wholesaler’s network. that may include an account number or PIN. leased circuits. whereby all of their network resources are provided and owned by other operators. for example: © Jonathan Hart . indirect access is provided by any customer’s last mile. private line or pay phone. They may be acting as a reseller or even as a ”virtual carrier”. in terms of megabits or gigabits per second.The Book of Billing for Telecommunications 2.g. the prevailing price (that may be a variable) or the actual usage. such as from a hotel room. the point of origin of the caller or the called number. If the wholesaler provides a pre-paid card service. The business of servicing a Reseller can follow a number of similar models. whereby fixed-value cards are sold through retail shops or other outlets. a satellite transponder. CDRs for calls to the indirect access point are recognised and charged according to contract but generally on some aggregation of time.g. before routing the call to its destination. the remaining credit on the card has to be checked before completing the circuit and again during the call. They will remain the customer of the operator for the last mile.2 Resellers and Virtual Carriers The wholesaler may in fact own no network infrastructure at all. The price we charge the wholesaler can be based on anything from a very simple formula to complex billing algorithms.3 Basis for Billing Wholesale Wholesale billing may comprise line rental or capacity rental (e. The wholesaler’s system then checks the caller’s identity from either the CLI or from the next part of the dialled number string. The operator will need to route all calls from that CLI to the wholesaler without necessarily having a dial string prefix. The wholesaler often requests a high-priority feed of their CDRs in order for them to be able to debit their customer’s account as soon as possible. not necessarily with charges for actual usage. but again only for line rental. theirs or the network operator’s. The first part of the dialled number string is the indirect access prefix. perhaps between specified access points or nodes or for specific time periods in the day leasing specific lines or circuits or set portions of larger-capacity trunk connections (e. Charges may be calculated according to the contract rather than using a published tariff. distance and total duration. either from the CLI. We will have to recognise their traffic.PBI Media Ltd 2002 38 .1 Indirect Access and Calling Cards With an Indirect access model.6. where the end-customer will opt to have all calls routed through the wholesaler’s network. 2.6. A variant of Indirect Access is the pre-selection model. a list of pre-selection CLIs has to be maintained at the nearest switch. The rating factors may include the routing involved. For dedicated connections. ! The implications for billing are that invoicing refers to the contracted register of services per customer. which routes the call to the wholesaler’s point of access.

2. and not for the call. We will need to use CDRs from our network to generate the wholesaler’s invoices. All CDRs that are generated for the wholesaler’s customers have to be examined for any interconnect cost or revenue potential. whether they will be passed to the wholesaler or not. Using our CDRs – we will pass a file of CDRs to their billing environment. since we cannot bill the end-customer on a retail basis. we are liable for the interconnect charge and will seek to recover it from the wholesaler. However. In this case a discount is applied if the service level achieved is less than the level agreed in the contract. we will need to process CDRs generated on our network. exchange pairs) Rated individual CDRs. What matters to us is whether the wholesaler will require for that purpose a file or data feed of rated or unrated CDRs generated on our network.4 Wholesaler’s Retail Billing How the wholesaler bills their retail customer will depend on their business model – we will only be concerned with our contract with the wholesaler. Calls that we carry on behalf of the wholesaler have to be regarded simply as ‘traffic’ on our network. we should be able to recover interconnect costs independently of the wholesaler’s bill for their © Jonathan Hart .PBI Media Ltd 2002 39 . depending on whether they require reprocessing using their own retail call rates. fixed amount per month Discounted variable rate. 2.5 In data services. based on standard retail factors (time of day.6. In such cases.6 Interconnect for Wholesalers We also have to take into account what happens to interconnect costs and revenues when deciding the pricing basis to the wholesaler. typically measured in terms of actual data transfer rates and error levels experienced. in order that the correct discount can be applied. a record of the measure for the billing period has to be provided to Billing. Quality of Service Billing ! ! 2. based on quantity thresholds Fixed margin over transport and/or routing cost. one challenge is to be able to measure QoS automatically and accurately – most often it is derived as a result of manual assessment. If the wholesaler’s end-customer uses our network to get to the wholesaler. The CDRs may be rated or unrated. If it is our last mile and the caller is also our customer.6. It will also need to rate the calls in real-time in order to stop the call when the customer’s credit expires. The wholesaler may bill their customers a number of ways: ! Pre-paid access cards – this assumes an access control mechanism at their customer’s point of access to the network to check the card when the call is placed.6. ATM for example. there may also be a contracted ‘quality of service’ (QoS) component to the charge. and the call terminates on our network. we can bill the customer only for rental of the ‘last mile’ access to our network. Using their own CDRs – they will use their own billing system.The Book of Billing for Telecommunications ! ! ! ! ! ! Flat rate. Except for the simplest formulae. If the call terminates on another network. We have to recognise CDRs that ‘belong’ to the wholesaler. charged at wholesaler-specific rating factors A currency multiple of the total number of minutes or megabytes per period Variable rate.

and then add the agreed margin. whereby the price is based on our costs.1 The Cheque Was In the Post Traditionally.1 Accounts Receivable Once a billing system has computed the total amount to be invoiced on this cycle for a given customer. A/R will set up a collection file. 2. the collections reminder process was initiated. before revealing their account details. not everybody actually pays. A/R generates the collection file and assumes that the debts will be collected. Here.PBI Media Ltd 2002 40 . possibly add a call set-up cost element. 2. but occasionally some of the IT people have been known inadvertently to blur the distinction. or by cash deposited at the bank. Innovative pricing models currently being offered include a ‘fixed margin over cost’ option.7. If the customer is to pay by cheque. In the event of an enquiry by the customer. they may overlook other debts owing from wholesale or non-telephony sales recorded in other billing systems. thereby using both the interconnect billing system and the wholesale billing system (if different) for this process. containing details of the Direct Debit or Credit Card transfer for each account. whereas the bank might have other ideas for some account holders. details have to be passed to Accounts Receivable (A/R) so that the collection of monies due can be prepared. unfortunately. The amount will be collected automatically on the specified date.7 Accounts Receivable and Collections There should not be much confusion between billing and accounting. there was the ultimate option for legal proceedings and other expensive means of indicating extreme displeasure at not receiving the monies due. on the basis that A/R is a separate system. Why not all of it? Well. the CSR first clearly identifies the customer (for security reasons).2 Collections The objective of the Collections process is to bank the highest possible percentage of the amounts billed. Finally. accuracy is best. If they look only in the retail billing system.7. there was the option of sending the debt to an external collections agency specialising in applying pressure. If payment was not received within a specified number of days after due date. we clearly need to determine any interconnect charges we incur.2.7. It may also be that the billing system ‘assumes’ the debt is collected. If the CSRs look in A/R for the debtor’s ledger to determine how much money that customer currently owes. It all depends how pedantic one chooses to be in answering the enquiry. goes through Remittance Processing and is presented to the bank for clearance a few days later. © Jonathan Hart . unless the customer raises an objection before the collection file is despatched. we need to rate the CDRs for interconnect charges. This involved sending increasingly strident reminders to the customer in the hope they would remember to send in the payment. If nothing happened. and in such matters. then all is well. Hence to bill the wholesaler. payment was made by cheque sent in the post. always able to come to an arrangement if the customer was in temporary difficulties. then one has to wait until it arrives. 2. 2. According to the customer’s preferred method and date of payment.The Book of Billing for Telecommunications customers’ access through our network – but this may be taken into account in the contract.

a record is generated by the billing system or from Accounts Receivable (depending on the systems configuration) according to the customer’s preferred method of payment. the Revenue Assurance process has a lot of ground to cover10. The bank then transfers the requested funds from the customer’s account to the provider’s account. finally by suspending the service completely (except for emergency calls). the contemporary process is more likely to include a very high proportion of automated electronic banking transactions. In some cases. not all customers have sufficient funds. later by interrupting calls. together with the instigation of cost-effective remedies where errors are found and correction is feasible. Unfortunately. just in advance of the due date. Another common technique is to redirect all outgoing calls via the call centre. but in many cases the request is returned to the telco. perhaps first by inhibiting international calls and premium rate services.3 Restricting Access One way of encouraging reluctant debtors is to restrict their access to the network. © Jonathan Hart . or how exclusive our service is.PBI Media Ltd 2002 41 .8 Revenue Assurance The purpose of the Revenue Assurance process is to minimise revenue loss. The traditional collections reminder process can be followed to some extent. The Revenue Assurance process is a methodical inspection of every step in the end-to-end billing process to ensure each step is performing correctly. Normal service would be resumed as soon as payment is received – and we would probably be a little quicker to introduce restrictions were it to happen again. so that the customer can be firmly but politely reminded to pay up. It depends on how valuable that particular customer is considered to be. to quantify any leakage and determine its source.The Book of Billing for Telecommunications 2. so the provider has to allow for this and treat it as normal. When the customer’s invoice is raised. The bank may automatically re-present those a few days later. Local custom may play a part – in some Asian countries the bill is habitually not paid until the service is actually cut off. Margin Management Briefings 2002 – applying Revenue Assurance to your business.7. Successfully Managing Revenue Assurance. 10 See: PBI Media Report 2001. and all is complete until the next billing cycle. the reference data. a firm but courteous reminder that the debt must be settled. reminding that the bill is overdue – and with some success. In repeating patterns. working practices and systems. 2.2 Automated Collection However. This can be introduced in stages.7. in effect. A file of these records is generated and sent to the bank or credit card agency. Revenue Assurance seeks to review everything that contributes to Billing. we may ask the customer for a deposit as part-payment in advance. Given that Billing is complex. so a number of the transfer requests are rejected by the bank. depending on the bank’s rules regarding automated transactions. These restrictions are. provided the customer is notified in advance – or it may be necessary for the direct debit instruction or credit card mandate to be renewed. 2. One European mobile operator initially sends out text messages every time a late-paying customer tries to use the service. the transactions. the calculations.2. the amount can be collected next cycle.

on average amounting to around 10% of legitimate billable revenue.The Book of Billing for Telecommunications Fig.2 The Objectives of Revenue Assurance The objective is to maximise received income for the enterprise. A succession of small errors and processing flaws can compound together to result in the enterprise receiving less revenue that they are justly entitled.1 The Causes of Revenue Loss Revenue losses or ‘leakage’ can potentially occur at every step in the billing process. 2.PBI Media Ltd 2002 42 . to ensure that.15 The Role and Scope of Revenue Assurance Customers Marketing Collections Product Assurance Credit Management CRM Policies Performance Measurement Billing Assurance Fraud Management Products & Services Customer Services Networks Billing Mediation Source: PBI Media Ltd 2.8. Another aspect is fraud. the intentional avoidance of payment for use of your services. as far as possible: ! ! ! ! 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 © Jonathan Hart .8.

faulty equipment and software bugs. Another source of weakness arises from products that are available but are not selling in sufficient numbers. Fraud. we compromise by seeking to achieve the optimum outcome. revenue is not collected. as far as possible. If the customer has not paid. 2. This can be caused by ineffective financial or process controls.8. In effect. The primary tasks in RA processes are to ensure: One of the outcomes of Revenue Assurance is the identification and elimination of weaknesses in the end-to-end process. customers are overlooked. and so on. Dealing with problems incurs unwanted extra costs. 2. and that the minimum is lost through bad debt or fraud. Revenue Assurance will establish and maintain techniques to ensure. resulting in poor execution of the process. from staff time dealing with the complaint to the cost of warranty claims or repairs. The RA process is one of investigation and analysis. In practice. the integrity of the end-to-end billing process.or by management not exercising enough attention to detail. Failing perfection. A carefully-designed series of process controls has to be implemented that trap errors as soon as possible. or give higher than average levels of operational problems or complaints. The definition of Fraud encompasses all access and use of network facilities where it is the deliberate intention of the user to evade payment. highlighting when data is dropped. © Jonathan Hart . the occasional misinterpretation of business rules . does the provider know whether the customer is bona fide or not? They have to balance the chance of collection problems against the potential revenues. It may be “only” theft of electrons – and it is hard to maintain an inventory of them – but it is a criminal activity. oversights or weaknesses in the ordering and billing processes.The Book of Billing for Telecommunications ! ! All revenue is collected from customers when due All fraudulent access and use of services is eliminated.PBI Media Ltd 2002 43 .3 ! ! ! ! ! ! Validating Accuracy 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. the objective is to minimise damage. to ensure the highest proportion of legitimate revenue is being billed correctly. Revenue Assurance is a continuing battle against a series of minor failures and accidental errors. a tradeoff between commercial risk and practical reality. performing an amount of checking before the service is first made available – whatever is considered ‘reasonable’.4 Fraud What presents an ongoing problem for the provider is the “F-word”.8.

PBI Media Ltd 2002 44 . the more revenue for the PRS – and it is the carrier that has to pay. the provider has to comply with legal constraints. bearing in mind that there are real costs associated with fraudulent interconnect. premium rate or shared cost calls. This means that the more calls to the PRS. whereby the subscriber gives false details when registering as a customer. depending on the local jurisdiction. The accepted wisdom is to make life as difficult as possible for the defrauder (single user or large group). hunt for the ‘back door’ dial tone used for remote diagnostics and software upgrades. The hapless business was then liable to pay for the calls – on one occasion amounting to over $160. 2. This will include external reference checks. only to find it is mostly used to support fraudulent traffic. in order to detect and prevent fraud by criminal organisations which operate on a national or international basis. Hence.1 Subscription Fraud The most common form of fraud is ‘subscription fraud’. never intending to pay. preferably that someone else has liability for. What should be avoided (this has allegedly occurred) is making a capital investment to upgrade network capacity. Losses should not be seen simply as revenues that cannot be collected. from the carrier. In addressing leakage through fraud.8. While it may be allowable to deny a connection to a suspected defrauder.The Book of Billing for Telecommunications The cost of fraud prevention should be in line with the amount of revenue lost. actually cutting off the call in mid-call may not be. they would dial the PBX number. 2. by sharing information. After hours.4. © Jonathan Hart .4. then it is a useful revenue stream – basically. then dial out on that number to the PRS. Clearly there has to be some form of customer validation procedure in place when registering new users. One technique used by the fraudsters was to establish a fraudulent connection. for example: ! ! ! Electoral rolls for domestic consumers Company registration checks for incorporated entities Credit checks for business users. even if the defrauder does not. even if the call is itself fraudulent. often using auto-dial PCs.8. A load on the network from fraudulent use might also interfere with real customers’ quality of service. if the PRS provider can somehow arrange for a large number of calls to itself.000 in one weekend – and the fraudsters would claim innocence as they invoiced the carrier.2 Premium Rate Service Fraud The principle of Premium Rate Service (PRS) is that the carrier and the PRS provider share the revenue for all calls to the PRS. It also mean working with your competitors. then identify businesses with PBX equipment.

IT and Billing. This means that every process that somehow leads into Billing has to be self-validating while the process is being executed. Additional controls are then required of numbers and names of files processed. If a data error is found and corrected. The controls must allow files to be recreated for this purpose. the Product Development process should involve nearly all departments of the company.The Book of Billing for Telecommunications Fig. for example if this program is run daily and the next in series is run ad-hoc or at period-end. mostly operating on the same principles as Quality Assurance – a series of steps that constantly check what is being done back against what was actually intended. Marketing. aggregate total minutes or megabytes and reconcile them within each executable program.5 File Controls The major purpose of process controls is to ensure that all work is accounted for. This may be made more difficult if adjacent programs are run on different cycles. What is then required is to check that one program’s output is input to the next program in the series. 2.Premium Rate Call Fraud Autodial PCs PABXs Honduras Mexico etc PRC Services 2. or whether rejected or discarded for some reason. For example. but not for an input file to be processed twice in the same run – this would quickly lead to duplicate billing and customer complaints.16 Example . Finance and Accounting – this is in order to ensure all buy in to the new product and set out © Jonathan Hart .6 Process Controls There are other effective means to improve revenue collection.PBI Media Ltd 2002 45 . whether processed correctly and fully.8. including Network management. The simplest controls are those that count CDRs or billable events.8. then the relevant program has to be re-run.

or at a particular suspect switch. 11 See PBI Media 2000 Report: Marketing and Billing New Products (for step by step process plan) © Jonathan Hart . In this way.PBI Media Ltd 2002 46 . then there is no assurance that the product will emerge as intended. costs and development readiness timescales11. If any one party is not a signatory to a new product plan. Mediation. The Message Investigation unit – the functional group within Billing that analyses and corrects faulty or rejected CDRs – should report the incidence of errors of different types. Additional process controls can be used to determine and monitor the causes of problems in processing CDRs.The Book of Billing for Telecommunications implications. further investigation nearer the suspected root cause can take place – such as within Rating tables.

often from different vendors . specialist applications or performance. Technical and architectural aspects have been avoided.and even different billing systems for different products. the primary software components and the data sources required for Billing.The Book of Billing for Telecommunications 3 Billing Systems and Billing Data This section is concerned with the main features of IT billing systems. it is likely that ‘the billing system’ will comprise several discrete components. there are hundreds of system vendors offering many times that number of current billing products. Fig.PBI Media Ltd 2002 47 .17 Components Customer Care Order Management Fulfilment Trouble Tickets Number Management Service Activation Provisioning Account Activation Work Force Credit Management NMS Billing System? CDR Collection Mediation Rating Billing Bill Production Other Sources Fraud Management Accounting Collections © Jonathan Hart . In theory. so this book will deal in generalisations.1 System Components In the larger telecoms operator. capabilities. this allows ‘best-of-breed’ system components to be selected and integrated into the whole solution. At the time of writing. 3. for different platforms. because presenting the full range of options is beyond the scope of this book. but it might be equally valid to acquire a fully-integrated solution from a single vendor.

PBI Media Ltd 2002 48 .or account-level discounts. adding one-time charges or credits. ! ! ! The overall environment will need to include other major applications that are integrated with or dependent on billing. for enquiries. or as a by-product of other processes (e.The Book of Billing for Telecommunications 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. 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. complaint and problem tracking.g. such as: ! ! ! ! ! ! ! ! ! ! The Call Centre – the interface between the operator and the customer Customer Care systems. The actual configuration for any one type of enterprise is not pre-ordained. installation tasks) CDR file collection – by file transfer from the switches. aggregating event charges and calculating product. © Jonathan Hart . 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. relevant taxes and invoice totals Bill Production –specialist invoice printing or itemisation file media preparation systems Collection – Accounts Receivable systems and late payment follow-up procedures Number Management – control and allocation of CLIs. but is predicated by IT strategy and the systems architecture. 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.

and the customer’s preference for payment method. all the functions will be needed in one component or another.1 Customer Account Data In order to send the customer an invoice. then relevant details are also needed of their bank (sort code. As long as the itemisation is presented by CLI or extension suffix. CTI etc Call Centre and SOM Fault Management Fulfilment Work force Management Middleware Billing Service Activation Accounting Data Warehouse The configuration will depend on prevailing business requirements.18 Architecture ACD. For corporate accounts. such as direct debit or credit card debit.2 Billing Data Sources In order for the end-to-end billing process to be able to perform correctly. you need to know at least their name and billing address. a larger data set is needed. or the resulting bill can be challenged – meaning that the customer can legitimately delay payment until the inaccuracy is resolved. This will record the company’s internal structure including all the different physical addresses or sites where service is to be delivered.2. 3. expiry date and sometimes a security code or card issue number). However. such that itemised bills can be presented in the order that reflects the customer’s reporting requirement.PBI Media Ltd 2002 49 . account name and number) or credit/debit card (provider. Generally though. then it is a relatively straightforward matter. a file can be assembled and sent to the bank or clearing house to arrange the funds transfer on the appropriate due date. if the customer © Jonathan Hart . Selecting the appropriate mix goes right back to understanding the business strategy and process support requirements for the enterprise. timetable. It is essential the data is accurate. special process or pricing needs. data has to be collected from a number of sources. vendor competencies and political necessity. With this data. card number. budget. If any kind of automatic collection is to be used. 3.The Book of Billing for Telecommunications Fig. in one form or another – and it is up to IT to resolve situations where duplicated functions exist or missing ones are needed.

3. These computers are usually high-performance variant PCs running specialist network management software programs that are responsible. Fig. (for example. among other things. for each occasion that a new variant is introduced. then Billing has to recognise what constitutes a Cost Centre from the data in every CDR from that customer. when a CLI could be shared by several cost centres). the billing system must have access to product description and pricing reference data. for call set-up. It will also show the price for every combination of billing factor values (or ranges of values) within each product. In those cases where the Cost Centre is not implied in the CLI. before entering the dialled number string.3 CDR Generation In contemporary digital networks. either by an automatic PBX function or on the keypad of the handset. then the customer has to enter the cost centre code. so the service can be presented clearly on the invoice. The programs also © Jonathan Hart .2. He must do this for every call. one for every instance of every pricing variation for each product. for example by Cost Centre.2. call routing and monitoring.The Book of Billing for Telecommunications requires sub-totals.2 Product Pricing Reference Data In order to calculate the price of a call or connection. Pricing reference data comprises a number of entries in a price table.PBI Media Ltd 2002 50 . control and routing of calls is managed by relatively conventional computer systems.19 Customer Hierarchy Invoice for rest Company Invoice for Mfg North office Group Cannot be Invoiced for subsidiaries Company Company Invoice for Sales Central office South office Sales Mfg Sales Mfg Sales 3. This data starts with an entry in a product table for every product or service.

The data is transferred as a data stream to the NMS computer. The CDR stack grows until one of two events occurs: ! If instructed to do so. data. This will be a standard sequential or text format file with simple control totals (number of CDRs. where CDRs are formed into a file. and it is the CDR that is the fundamental source of data for usage-based billing.4 ! CDR Stacking and Collection The Network Management System (NMS) sends a polled request to the switch for the contents of the CDR stack. In this way. and is updated while the call is in progress. time of the call • The type of call (voice.The Book of Billing for Telecommunications generate CDRs for each connection instance or Event. but the above lists the major items most commonly used for billing. When a caller starts to make a connection. whether normal (A or B hanging up) or not (service break) • CDR identification number. usually to the nearest part-second • How the call ended. © Jonathan Hart .2. data starts to be lost. If the call continues for a significantly long time. The switch is unable to save CDRs beyond this capacity. There will be other data items as well. fax. When the space available for stacking CDRs overflows. The stack reaches a configured limit. These files are held ready for collection for the next stage in the process. time and end date. number of minutes or megabytes involved in those calls or connections). The extra records provide a valuable information source regarding intra-network call routing. Mediation. and rarely is configured to save event data on local disk – it is usually too busy managing calls. traffic congestion and faults. the switch software assembles the dialled string of digits and caller information to format a CDR. the CDR is written to a stack of CDRs for completed calls and held awaiting the next step. etc) • Duration of call. Because the stack of CDRs may include records from this superset of events rather than the subset of simple call events. expressed as a number of CDRs or a total data size. the term System Message Detail Record (SMDR) is sometimes used (as well as Event Records) to describe the generic event record at this stage.PBI Media Ltd 2002 51 . the switch software will generate CDRs for any or every event or incident on the network. The typical CDR will usually include at least the following basic data items: • Calling line identification (CLI). then one or more “in-progress” intermediate CDRs may be written out during the call. according to the values set for its configurable parameters. The Call Detail Record is created when the caller finishes dialling. a unique tag for each record • Routing information • Identification of the switch or hub that generated the CDR. polling incidence. also known as the ‘A’ number – representing the party that placed the call • Called number (or ‘B’ number) – the party receiving the call • Start date. the SMDRs become a major input to network engineers and management for capacity planning and network problem resolution. When the call ends. operator connected.(for whatever reason). 3.

regardless of whether they actually use it. meaning that the charge is not repetitive. This will tend to change only occasionally (e. Such charges are often calculated manually.5 Recurring Charges From the earliest days of telephony. external to the billing system – unless an internal menu of pre-defined. such as for site surveys. © Jonathan Hart . Initially they were charged a subscription fee. s Billing is required to look up the charge based on the type of service contracted. Most customers will thus be billed a recurring charge. being updated to allow for inflation). This might comprise. giving rise to the term ‘subscribers’ rather than ‘customers’.6 One-Time Charges and Credits Where high-capacity voice or high-volume data services are provided. a router or other Customer Premises Equipment (CPE). 3. standard fees or equipment item prices already exists for use.2. there is usually an equipment component involved in service provision. so billing will only have to calculate minor adjustments due to the service starting. Raising the appropriate charge is usually one of the last steps of the engineering work scheduling and execution process.The Book of Billing for Telecommunications 3. though often termed an ‘access fee’ or ‘line rental’. the operator may choose to charge for the work and/or the equipment involved. changing or ending part-way through a billing period.g.2. This situation will give rise to a one-time charge to the customer. although the value of the charge may have been negotiated during the order management process. it has been customary to charge customers for the availability of the service. for example. engineering installation and commissioning. levied on a periodic basis (typically monthly or quarterly) regardless of the nature of the service. installing a Private Branch Exchange unit (PBX). or the equipment itself. The revenue was required to offset the heavy investment in lines and equipment – and this fee still applies.PBI Media Ltd 2002 52 . Depending on pricing policy.

Records that have faulty or unrecognisable contents are set aside for manual scrutiny by Message Investigation personnel.3. and control totals are maintained accordingly. An additional external control is also needed to ensure that all files have been transferred.3. This involves both field sequence and dimension changes.PBI Media Ltd 2002 53 . and often includes translation of contents from the original set to the value range set expected in the rest of the billing suite. one for the caller (charged at zero rate or at the caller’s part of the shared rate) and another for the recipient. Sometimes the whole file is rejected. and these will have been acquired over time as the network expanded. Another cause of duplicate CDRs arises when more than one switch generates a CDR for a given connection as it transits the network. 3. 3. and from the need to deal with records generated for management of other non-billable network events. so records will be presented in a wide range of formats and layouts. into a common format suitable for processing by the next step in the billing chain.1 Selection and File Controls One of the primary functions of Mediation is to be able to amass and process CDRs from a variety of sources. the CDR is rejected for review. CDRs can be generated on the network according to run-time parameters set by the NMS. Another mediation function occurs with free-call and shared-cost calls. The mediation system takes validated CDRs and standardises the format to meet the requirements of the next steps of billing. Mediation sits between the network and the rest of the billing system components. The first step in mediation is to validate the file controls for each of the files transferred from the NMS. CDRs can also represent all the different types of call or network transaction that occur. For example. If there is any problem.3.2 Validation and Re-formatting The format of each CDR is examined. but it is in effect only the last that should be used. With each new version. Non-billable event records are usually sent to other systems for analysis. with a very long call there may be a number of intermediate CDRs generated on the network. as the safest means of ensuring the data sent to Billing is complete and correct. to insulate billing from the impact of changes to CDR formats. Even if they were sourced from the same vendor. there will be a number of switches.3 Mediation In the average network. it is generally necessary to create a duplicate CDR. by all the different types of switch and hub equipment. Mediation therefore has to discard all the earlier CDRs in the set.3 Consolidation and Duplication: Mediation Rules The next stage is to ensure that the number of CDRs handed to billing is correct and consistent with the number of calls detected. 3.The Book of Billing for Telecommunications 3. Every CDR is checked for completeness and individual fields are validated to ensure the values fit within the ranges defined for that type of CDR. the vendor is also quite likely to have introduced new functionality or new facilities for control or management of the network. Mediation has to recognise the uniqueness of each call and select one CDR for it. correction and resubmission as appropriate. it is quite likely that different versions or even different types of switch were supplied. the party that is © Jonathan Hart . Records that represent billable events are separated out from the others for further processing. In these cases. Hence there is a similar likelihood that the event records generated by the switch will incorporate different data elements – and thus be a new format record.

before dialling the called number. © Jonathan Hart . perhaps from accidentally re-processing a CDR file from a switch. however. Any unexplained cases are selected out for further investigation. it is up to the caller to specify a cost centre for later bill analysis purposes. Many of the rules are concerned with record formats and data sources. how to check file controls or dictate how to recognise and process special case CDRs such as free calls.The Book of Billing for Telecommunications paying the other share of the call charge. In these cases. knowing the account number is likely to be all that is needed at this stage. for example. cross-referenced to the account to which the calls should be charged. Guiding is then given by the account number. Having a duplicate also ensures that both parties will see the call on their invoice itemisation. it could be a shared-cost or free call event. a duplicate caller identity could mean that an attempt at fraud had been made with cloned SIM cards. The CLI or even the calling extension can be used to determine to which of the customer’s physical sites the call belongs. This extra data is recognised by the network switch and is recorded as an extra field in the CDR. 3. Apart from the cases described above. The prefix is entered using the handset keypad or perhaps automatically by software in a “smart box” or their PBX. and how to crossmap data elements from the input CDR to the format needed for billing. It is generally not desirable to send duplicate CDRs to Billing. Others define. Alternatively. This has to be performed as quickly and efficiently as possible. An extra sequence of numbers is dialled as a dial code prefix for each call. The database records the CLI for each customer (for corporate customers. allowing the charge to be allocated to that site. Maintaining the rule set is an important part of billing accuracy. in which case the “A number” is meaningless and an actual account number is used (indicated in the type of event) with a product or service code that may be used to determine the unit price. noting the generally massive volumes of data that have to be processed. Mediation and Rating between them have the task of guiding the call charge to the called party (free-call) or to both (shared-cost call). by looking up customer service records in the billing or rating database. For corporate customers. usually with the A and B numbers reversed. perhaps many CLIs or a range of numbers). This can in most cases be worked out from the ‘A’ number.PBI Media Ltd 2002 54 . rating systems are mostly concerned with two primary functions: ! ! Guiding the call to the account responsible Calculating the undiscounted price of an event. In older networks such as analogue mobiles. The billing system then uses the code to allocate the charge within the corporate account.4. 3.4 Rating and Pricing Ordinarily. For residential customers. Mediation lays out as many CDRS as it can in the computer’s memory and scans for the key signs of duplication. The detailed functionality of Mediation is governed by a set of rules that are tailored for the needs of the enterprise and entered as program parameters to the mediation system. it is desirable to know to which account the usage charge should be sent. With some business customers. The event may alternatively be related to installation or purchase of equipment. it is a fair guess that duplicates mean that some form of error has occurred. To detect the duplicates.1 Guiding and Account Identification Having conveyed a call across a network connection. there may be a need to allocate the call to a cost centre or sub-account to reflect their business structure.

The various rating factors determine which price is used in the set of circumstances defined by those factors. line speed.20 Rating Voice and Data Geography Calling and Called Numbers. Network Time Weekday / Weekend Volume Duration Direct dialled.2 Rating Once the Event Record is guided. This somewhat depends on the design of the software being used – it may be that “normal” rating is used for simplicity and is subsequently overridden during the billing process. These are factors used to search against entries in rating tables of prices for each type of service or product to find a match. peak or off-peak). 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. 10. depending on the type of service and the tariff or price plan being offered. A number of rating factors may be parameter to the rating calculation.1 seconds. Carrier. then that start time will fit into a time charge band (e. if a call is started at a certain time of day. Committed Information Rate Event Class etc The primary drivers for rating are found in the CDR or event record data.The Book of Billing for Telecommunications 3. reverse charge. thereby dictating the rate to use for the call.g. 0.0 kbytes) Connection charge or call set-up fee © Jonathan Hart . special dates Route. any customer-specific contracts can be retrieved and used in the pricing.PBI Media Ltd 2002 55 .4. operator connected. etc Megabytes / Packets Quality. Roaming Start / end times. Error rate. For example. Fig.

the event records are filed for processing at the end of the billing cycle for that account. so the billing process will need to aggregate the interim CDRs into a single billable event. Calling the helpline. Sending a fax. © Jonathan Hart . 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.2. the Distance charge band may be derived from the two exchange codes of the calling and called numbers. High-performance data circuits use different equipment and connection protocols. hence this cost element is taken into account when determining the pricing formula. every ten minutes) – particularly useful if the connection breaks at some point so that the customer can at least be charged for the usage up to the nearest intermediate point.4.1 Data Data calls are classified differently because the profile of a data call is different to a voice call.4. the provider may choose to bill at normal connection rates. there needs to be a corresponding entry for each type of event in the pricing table showing the unit rate. What matters for charging purposes is the amount of data transferred across the connection (measured in kilobytes or megabytes) as well as (or instead of) the duration. For example.The Book of Billing for Telecommunications ! ! ! ! Minimum charge Maximum charge Date and time that this rate is effective from Date and time that this rate is effective to. Other factors include the transfer rate (faster is more expensive) and quality of service in terms of the likely or actual error rate during transmission (perhaps taking error detection and correction facilities into account). The fields marked with and asterisk (*) include values that need to be extracted from other tables for each event record. In many cases. featuring contiguous high-rate transfers in either direction. 3.g. These events include: Call Forwarding. using the values from the CDR. data calls are set up for connections between computer systems. or they may choose not to bill for these events.PBI Media Ltd 2002 56 . and potentially at different rates to normal connections. Directory Enquiries.2 Other Usage Events In this category are all events that might not be classified as calls or data connections. Usually.2. interrupted occasionally. Recording or retrieving a voicemail message. If data were transmitted by voice. even if the call terminates normally. intermediate CDRs are usually generated (e. On the other hand. the customer will expect to be charged once for the whole call. or at premium rates (perhaps for added-value services such as helpline calls). Unless these events are priced before being sent to Billing. the exchange pair is found in a table of valid pairs giving the resulting distance band prevailing on the date and time on which the call was started. it would be analogous to a person yelling continuously without pause until they ran out of breath. possibly immediately followed by another yelling in the other direction. and hence may be of varying duration from momentary to semi-permanent. but are potentially billable. For data calls. Once guided and priced. 3.

for the time of day factor (less than or equal to call start time) and then multiplies the given corresponding rate per second by the call duration.21 Simplest Rating Example From CLI # / To CLI # / Start time / Number of minutes Call #1 Call #2 From the Rating tables: Exch A to Exch B / Before 17:00:00 / @ 0.09 From A / ToTo Dxx 18:53:02 / 15:02.09 Axx / B / / 15:30:27 / 15:02. If the two exchanges are the same. Customer attributes. Billing would first determine the charge band by looking up a table of exchange pairs to match those involved in the call.009 per sec Plus : Pricing variations for (e.002 per sec Exch A to Exch D / Before 17:00:00 / @ 0.119 From A / ToTo Bxx 15:30:27 / 15:02.PBI Media Ltd 2002 57 . Special dates. Day of week. Type of service. To determine the unit rate. Charging for distance implies that the two exchanges involved (of the A and B parties) are recognised to determine a distance charge band. Terminating Operator. Fig. assume the call charge to a conventional retail customer depended on 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 event instance – unless default values were taken for any missing factors.3 Applying Rating Factors In a simple example. Billing examines the pricing reference table for that product and charge band. Price 9.The Book of Billing for Telecommunications 3.025 per sec Exch A to Exch D / After 17:00:00 / @ 0.09 Axx / B / / 18:53:02 / 15:02.010 per sec Exch A to Exch B / After 17:00:00 / @ 0.g.2. Freefone / Premium Rate calls etc. then it is priced as a local call.) Originating Exchange. Then using that value and the other two factors. otherwise the matching entry gives the charge band. A very simple example of Rating is presented in the diagram.021 Price 8.4. contract prices. Billing has to match all the corresponding values in the pricing reference table.09 © Jonathan Hart .

5 Split Rating In some cases. This means that rating systems often need to be able to access or hold more customer data than the CLI numbers. then clearly the number of entries in the reference data table increases dramatically – each time extended by the number of values (or value ranges) of the next new factor. This allows the correct charge per event to be passed to billing – or to a “Hot Billing” output (discussed later) and for ‘excess’ use to be passed to the Fraud management system for evaluation. or with pre-paid mobile services.The Book of Billing for Telecommunications 3. 3. It would also allow Billing to process CDRs against the correct pricing set applying at the time of the call. so that accumulated usage totals per CLI or per product per CLI can be maintained for discount purposes. with the resulting call charge being the sum of the parts. While the call is being set up. The ‘system’ can be anything from a call-box card reader – working on much the same principle as with simple coin operation: pay first. This situation would continue until a price increase was announced. flat rate per distance regardless of time of day. depending on the distance and time of day (or other factors) involved. In some cases. whereby a call starting 10 seconds before peak time would be charged for 10 seconds at the low rate and the rest at peak rate.4 Rating Table Dimensions If in the preceding simple example there were only 6 distance price bands. If the operator applies split-rate billing to eliminate such discrepancies.2. the system has to determine if there remains sufficient credit to allow a minimum connection time. depending on the number of new factor values concerned. As additional factors become involved. shrewd customers would place a call just before peak time started. the corresponding variables and value combinations. 3. So to correct this anomaly an operator would specify split-rate charging for calls.4. but the principle is that the customer pays in advance for a given amount of usage. Hence. not at the time of processing. In either case the system has to check the credit available – either from the card or from an accounting database for a given account before connecting the call. keeping it open during the day to reduce costs. Holding two sets of data allows billing to overlap the processing of existing CDRs against the old values with the need to set up the new data ready for use in time. there would be 6x4x1 = 24 entries in the rating table. maintaining the table with a fully correct set of values becomes a continuous and demanding task.4 Pre-Paid Service Rating There are several different types of pre-paid service. 4 time of day bands and only one product. which leaves the customer open to being under-or over-charged. once for each band.2.3 Rating Discounts Increasingly. Rating has to decrement the © Jonathan Hart . depending on the time. This has to be examined for rating every CDR. calls will span the start of a new time band. then in effect that part of the calculation has to be performed twice (or more). cut-off on expiry of credit. considering in practice a likely range of products and services.4. when the price table size would need to double.4. when a value-holding card is purchased at a retail outlet. There would also need to be the distance charge band table holding all valid exchange pairs (perhaps several hundred pairs) and the band corresponding to each pair (one of the 6 in this example). A pre-paid network service can also be based on an advance credit to a normal post-paid account (as when a deposit is paid before the service may be used). the computer intelligence to calculate per-CDR discounts is moving away from the billing engine and closer to the network.4. 3.PBI Media Ltd 2002 58 .

Hence in comparing © Jonathan Hart . CDRs which cannot be billed (guiding number not found.PBI Media Ltd 2002 59 . and other causes. In one country. The incumbent was able to set an interconnect charge to a competitor at the amount collected per call. by product or service. ! These totals give a measure of the extent to which CDRs are flowing through the system. The rate per call for a given distance may be set by the Government Regulator for the country concerned. 3. such as: corrupt or incorrect data. and this is usually performed in the switch software rather than as for normal post-paid services. perhaps fraud or where a new customer is not yet set up in the billing database). So. Generally a significant number of CDRs cannot be successfully processed. The causes are many. per billing cycle.5. Mostly. Mediation will routinely alter the total number of processable CDRs. by discarding CDRS according to business rules (such as zero-duration calls). compared to the total processed in the billing system. the typical controls include the following: ! For each CDR-generating switch in the network.1 Billing and Invoicing Operations Controls Any financial system has to have controls. post-call in a separate system component. hence each operator will charge the same for terminating calls but competitively for transit. the result was somewhat predictable – the competitor had to withdraw from the market. to ensure that all transactions are recorded and auditable. for example: by consolidating interim or partial CDRs into one. but they must be synchronised to be useful operationally. usually.5 Regulatory Issues The prevailing regulatory rules depend totally on the jurisdiction in which the call is made. the following totals should be reconciled to the corresponding numbers processed in each step of the billing process.5 3. no rating table data for this type of product or service. to notify both the A and B parties of their share of the call charge). no regulatory rules were set regarding connection charges to the incumbent operator’s network from pay phones. file inconsistencies (where file control totals do not match file contents).4.The Book of Billing for Telecommunications available credit at a rate given by the normal prevailing rating factors. charges are set in outline and then varied by competition. per day): o o o o The number of CDR files sent from each switch The number of CDRs held in each file The total number of minutes of usage held in the CDRs in each file The total value of rated CDRs in each file (this may arise from CDRs generated by other operators. or it may not. compared to the total sent to the bank for automatic remittance collection (direct debit) plus that sent by other means (electronic or post) The total undiscounted value of calls rated. or from pre-paid services where a value is computed by the switch) ! The total value of revenue in invoices raised. to ensure the incumbent is not able to prevent fair competition. 3. The controls should therefore highlight where losses are detected. The idea of regulation is to ensure a level playing field for competition. by generating additional CDRs (for free-call or shared rate services.

Larger customers then requested that the detail of itemised calls and call charges should be sent on magnetic media (floppy disk or CD-ROM). sometimes incurring a call charge in the process). The set of billable CDRs that are ready for invoicing are collectively held in what is often called the ‘bill pool’. whereby their invoice is raised when that cycle is processed. it is important for operations staff to be able to reconcile like numbers. 3.a valuable aid for the customer in managing use of their telephony services. extension or location) or for abuse detection (out-of-hours calls. it makes it straightforward for Billing Operations to choose the cycle. with only the invoice summary sent on paper. etc). so large it would often be outsourced to a specialist printing company with high capacity equipment. In the past.5. customers are requesting their bills to be sent electronically by email or using other facilities collectively known as Electronic Bill Presentment and Payment (EBPP)12.5. also EBPP vendor profiles © Jonathan Hart . international or premium rate calls. 3. The bill pool contains all rated CDRs that are as yet unbilled. EBPP – The Market Opportunity. so the majority of CDR data needs to be processed at month-end. This also permits the provider to offer CDR analysis tools as part of the service . knowing the overall workload profile associated with that cycle. Furthermore. 12 See: PBI Media 2001 Report. many operators and service providers are moving the CDR detail to a secure internet web site for each customer to view and download as they wish (incidentally. so they can allocate billing cycles to processing days within a day or two of the preferred invoice date.PBI Media Ltd 2002 60 . Corporate customers tend to require their invoices to cover events up to the end of a month. By selection of a billing cycle for each account. At this stage of the process. sending a file rather than paper reduces environmental impact as well as bill production costs to the operator. 3. This offers flexibility to the customer for call charge analysis (maybe by call centre. for later collection from the customer.The Book of Billing for Telecommunications control totals from different system components.1 Retail Billing Aggregation and the Bill Pool The first task is to select which accounts are to be billed at this time. Residential and smaller business customers tend not to be as concerned about the invoice date. however. Use of paper as the invoice medium remains a legal requirement in many countries.3 Bill Production After the billing run. bill production implied a hefty print run. One way to achieve this is to assign a billing cycle to each customer account. Enough cycles need to be set up to offer flexibility to the operations staff.6.6 3. so they can be processed when more convenient.2 Billing Cycles One of the challenges facing billing operations is to level out the workload across the month. it is necessary to record the invoice details in the accounts receivable system. Increasingly. invoices are ready for the final stages of production. Extending the principle further. but may not all relate to the current period – usually if they were delayed into billing for some reason in an earlier period.

this will be in date/time order by product or service within service identifier (CLI).6. Having assembled all the aggregation discounts for the account. This sort order to some extent depends on whether the pricing formula contracted with that customer includes a discount (see next section). If itemisation is required. Then it is necessary for the sort sequence to include product group. Generally. Aggregating usage in this way allows the period discount by product to be computed. GST etc) if applicable.22 Discount Schemes “Free minutes” 100% Tapered discount (applies to all usage) Tiered discount (etc) Discount rate 9% 6% 3% Usage level © Jonathan Hart . including tax (VAT. then it may be necessary to rearrange the CDRs in the correct sequence for presentation. cost centre or sub-account levels as necessary. Fig. or if the customer has a hierarchic account structure.2 Billing Discounts Thanks to the pressures caused by fierce competition in the telecoms market. initially by product or service package within each customer account. the range of discounts and other incentive schemes being offered to customers are many and varied.The Book of Billing for Telecommunications For each account in the selected bill cycle. but clearly the customer may be offered an option to have the charges grouped according to some other sequence. but the imagination of marketing and product management will produce others possibly unrelated to total usage. the invoice contents can be calculated. In essence they fall into the three main types discussed below in this section. 3.PBI Media Ltd 2002 61 . here raised as a fourth type. it is necessary to sort and total up all the rated CDRs.

After the threshold number of free minutes is used up. or rated at the special price. whereby the more the customer uses the service in the billing period.2.6. More often the calls require special prices. and recognise CDRs for calls made to those numbers. the customer might receive no discount at all (zero percent). whereby calls to a list of perhaps five or ten customer-specified numbers would be rated at a heavy discount. 3. depending on the price plan. whereby as a threshold is reached. usage thereafter is subject to (in this example) three percent. the discount is zero thereafter. Such discount offers are often not presented as ‘discounts’ in the sense of a visible credit against the normal price.1 Tiered Discounts This is the first basic type of discount. then six. so it has long been customary for operators to encourage non-essential traffic to be made during quieter periods. to the extent it is now offered by most operators in return for either a small recurring charge or free for setting up the facility. 3. MCI’s offer remained unique (and hugely successful in attracting new customers) for several months while competitors’ IT billing systems were frantically updated to match the facility. and so on. then as usage passes the first threshold. regardless of when the call was made. naturally much lower than peak rates. to apply over the defined routes or on the days or at the times quoted in the offer (an example of this could be an offer of: all calls to Australia half price on Christmas Day). depending on the billing system implementation. The other significance of this discount for Billing was that MCI’s main competitors could not support the Friends and Family scheme in their billing systems. the first tier.3 Free Usage Most mobile phone users will be familiar with this type of discount. 3. so the billing system must be able to split the discount across the threshold.6. This was achieved simply by offering a much cheaper rate per minute for evenings and weekends – this additional usage is particularly valuable to the carrier in off-peak periods when the network is by definition not busy. The CDRs are then either grouped as a special call type to show the discount. the higher the level of discount he receives.2 Tapered Discounts This is a variation on tiered discounts.2.6. At those times. Thus for a minimum level of usage. Consequently. This is another illustration of how essential Billing can be in countering competition. the level of discount entitlement reached will apply to all usage for the period. What this means for Billing is that the rating of call CDRs related to the © Jonathan Hart . assuming the costs of promoting the special offer are covered – the cost of transmission and servicing of extra calls is very small compared to the revenue.4 ‘Friends and Family’ The ‘Friends and Family’ discount was a notoriously successful discount when it was first offered in the USA by MCI to their customers. Most fixed line customers will be familiar with the concept. There are much heavier loads on a typical network during the business day. What it amounts to is a tiered discount with the first tier set at 100% discount.6. up to the next tier threshold.2. Note that reaching the maximum number of free minutes may occur in the middle of a call.6. 3.The Book of Billing for Telecommunications 3.PBI Media Ltd 2002 62 .2. whereby a number of “free” minutes are allowed per period. The billing system had to be able to store the list of specified numbers for each authorised CLI. This is more generous to the customer than a tiered discount. The important distinction is that the discount applies not to the total but to usage after that point.2. all additional revenue generated will be of benefit.5 Other Discounts Marketing will create many special offers in order to entice new customers or to stimulate additional usage.

The CDR for interconnecting calls holds the routing in the form of a chain of codes representing the identifiers of each of the network operators involved. and for reconciliation for outwards calls against the other operator’s interconnect invoice 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.PBI Media Ltd 2002 63 . since there is enough similarity in processing requirements. The definition of “group” can vary from bill cycle to cycle – so that the message can vary from a simple seasonal greeting to targeted publicity to promote an upgrade offer for services used in that customer group.7. as well as on factors agreed in the individual contract We need to calculate amounts due for invoicing inwards and transit calls.The Book of Billing for Telecommunications offer has to be performed to the exception rather than to the rule of normal business.7 Wholesale and Interconnect Billing System The system components used to process Wholesale and Interconnect billing are often shared. 3. so the rating system component has to be more flexible than otherwise. for example. while different payment options and levels of detail can attract others. to account for the call set-up cost component that is not generally billed for retail The rating algorithms require a data structure based on routing as well as country pairs or remote network and exchange pairs. So. 3. it can be very useful to be presented with a single bill for all services regardless of the CLI from which it was made. has several lines (and thus several CLIs). format and design can attract different market sectors. One means of communicating with a particular customer group is the addition of a marketing message targeted at that group.6.4 Billing as the Differentiator Information presented with the invoice can be a major factor in attracting and retaining customers.1 Interconnect billing is concerned with calculating the amounts due to be paid to and received from each of the network operators that our enterprise connects with. Interconnect ! ! ! ! ! 3. Choice of the customer grouping and the corresponding ‘message of the day’ to present on the bill can become a powerful marketing tool. They will generally not be the same as those used for retail billing.3 Bill Formats and Messages Part of the competitive appeal of one operator against another can be the presentation and appearance of the bill. to calculate the amount due © Jonathan Hart . A larger business may prefer to have calls itemised by cost centre or to have the invoice divided over several accounts.6. If a residential or small business customer. 3. because: ! ! ! The CDR data set that has to be processed includes CDRs that are not billed to retail customers Often zero-duration calls will be included. Choice of style.

Reconciliation is then based on matching the total minutes and total numbers of calls against the incoming invoice. since many calls will remain on our network CDRs that are billable to our Wholesale customers – but not all of the Wholesale CDRs. 3. We do not use these CDRs for retail billing – simply because the caller is not our customer – but we do need to add these CDRs to the set to be processed for reconciliation of incoming interconnect invoices. the rate for the distance concerned and any other rating factors.1. The CDRs will nonetheless be processed for wholesale billing purposes. We may only need to process CDRs from a specific set of switches.1 Unfortunately. we use all those CDRs which have an interconnect element to the call (i. © Jonathan Hart . Billing aggregates the rated CDRs by operator and settlement method for the route or destination concerned to await reconciliation against the operator’s invoice. we can only estimate call costs based on country pairs or network and exchange pairs rather than on actual routings used. together with a fair comparison of the amount invoiced against our estimates. In those cases. Reconciliation Estimates ! 3.7. we do not always know the full sequence involved in the interconnect routing. The rating factors are different to retail.7. It is of course important to synchronise the periods being reconciled.1. In other cases we may have to recognise the A number as being a wholesaler’s pre-selecting customer or even that the B number has a prefix of the wholesaler’s point of presence.2 Wholesale For wholesale billing. since it depends on how the wholesaler connects to or within our network CDRs that are only billable for interconnect – such as transit or incoming terminating calls. We may need to pass the CDRs to the wholesaler for them to be able to perform their retail billing function. originating or terminating on another network). together with the set of CDRs for outgoing side of transit calls.1. The system will examine the code for the adjacent network operator (to whom the call was passed) and determine the settlement method. we have to identify which CDRs belong to the wholesaler. to calculate the amount due from the wholesaler for use of our network.2 Interconnect .e.3 Interconnect .7. according to the wholesaler’s network model. 3.PBI Media Ltd 2002 64 .The Book of Billing for Telecommunications from or to each operator.Outgoing The source data for outgoing interconnect usage is the same set of CDRs used for retail billing. CDRs for the wholesaler’s customers must not be processed by our retail billing.Incoming and Transit The CDRs we use for incoming or transit calls will be generated from our network node at the point of interconnection with the adjacent operator.7. depending on the agreement. We may or may not know the entire route involved. This is because our interconnect neighbours (or others further down the route) will sometimes mask out the routing data for commercial reasons. 3. Note that the set of interconnect CDRs will include: ! ! CDRs that are billable to our retail customers – but not all of the retail CDRs.

The tracking of amounts due and received. While smart paper-handling systems can alleviate the task. Otherwise we have to wait until the customer pays the account by some other means. In this case again we have to wait until we are notified by the bank that payment was made in this way. then the objective of billing is to generate complete and accurate invoices. for those customers who have authorised it.The Book of Billing for Telecommunications 3.1 Accounts Receivable and Remittance Processing The billing system will have notified the Accounts Receivable system of details of each invoice raised. Fig. sending the cheques to the bank. allocating the payments to the account concerned. On the appropriate due date. 23 The Collection Process Send Bill Remittance Processing Send Reminder Call & Discuss Suspend Service Suspend Account Fraud Management Service Management Legal Action 3. batching and validating the papers. The business may offer residential accounts to be paid by cash or cheque into a bank or post office. the actual collection of money. and is often outsourced to the bank (using a ‘Lockbox’ facility). of revenues due to the business. we have to wait for the bank to notify us what has actually been received.PBI Media Ltd 2002 65 . If the customer pays by cheque. specifying the account numbers and amounts concerned. we have to have facilities to receive and process the cheques. are the next steps in the overall process. © Jonathan Hart . a direct debit or credit card transaction will be sent to the financial institution concerned. etc. usually cheque or a bank transfer (initiated by the customer).8 Accounting and Collections If the objective of the business is to generate profits. The process is quite cumbersome – opening the post. In this case.8. it is becoming an increasingly more expensive option and thus less attractive for the business.

8. we again have to wait for the customer to pay. unless some sort of pre-authorisation is used (e.8.8. the potential fallibility of the retail customer and high equipment costs requires a more rigorous solution. or for mobile services. different persuasion techniques are needed to the gentler and more courteous customer care services the business normally provides to regular customers. The next part required the switch to recognise the remaining credit on the card.The Book of Billing for Telecommunications 3. details of the customer should be recorded for subscription fraud analysis and to avoid offering the same customer any service in future. 3. A simple trawl through the ledger will highlight who has not paid. under. Use of pre-paid services remains the biggest growth area in telecoms. why not for mobile? The concept requires changes in the handset. For fixed line services.2 Exceptions Every remittance handling process has to allow for exceptions. usually outsourced. we have to trigger recovery action that will become progressively more firm. an SMS text message reminder is sometimes used.g. Another involves altering the service parameters on the network so that outgoing calls are redirected to our call centre to insert a discussion with the customer regarding non-payment. The third part required billing to ignore CDRs for pre-paid events – but include them in the set for traffic analysis and capacity planning. 3. the business has to decide that the customer is unable or unwilling to pay. credit card remittances) or by pre-payment (as in pre-paid mobile services). When the deposit is used up. so the Collections process moves to the next stage. no need for any contract or bill shock at month-end. to record remaining credit and to cut off the call when credit was exhausted. monitored typically on a daily basis. allowing usage up to that amount and sometimes beyond. to rate the call in real-time.8. It provides anonymity to the customer. the first step is to send a reminder notification. Generally.PBI Media Ltd 2002 66 . international or premiumrate calls. It also © Jonathan Hart . Many companies rapidly reach a point whereby the customer’s service is suspended altogether. the business should have received a remittance from the customer. 3. This is a simple way of managing the risk. except perhaps on a pre-paid basis. but increasingly – partly because of risk of fraud – businesses are looking to more prompt ways to encourage the late payers.3 “The Cheque Is In The Post” After 30 days from invoice date. After all. The first part was to link the stored value on a pre-paid card – bought through any one of a number of different retail outlets – to the handset and thence to the control software in the network. Provided there has been no dispute about the invoice. These include sending an email message.4 Bad Debts At some stage after the reminder has gone out. the customer could be advised and perhaps the service restricted until the next billing cycle or the next deposit is received. the switch and the billing system. Either way. In any event. One technique is to restrict the customer from making long-distance.5 Pre-Paid Services One obvious solution to minimising bad debt is to bill the customer in advance. for example: cheques dishonoured. and the debt passed to a specialist debt recovery service. accounts closed. The business cannot really be sure the account is paid until the time for processing and clearing the payments has passed. If pre-payment works for pay-phones.or over-payments. For mobile services. this often amounts to no more than requesting a customer deposit or payment in advance.

fraud levels and traffic patterns.PBI Media Ltd 2002 67 . © Jonathan Hart . usually with a systems interface from Accounts Receivable. As such.8. analysed by product type or customer type or whatever the Chief Accountant requires. but is a valuable source to review costs and historical revenues. It will also receive details of remittances and bed-debt write-offs. 3. unit call prices are very high. it will receive details of billings. To offset the handset costs. so the provider benefits. It is probably not the best source of up-to-the-minute information about sales.The Book of Billing for Telecommunications helps the customer to maintain tight budgetary control – particularly useful for students.6 General Ledger This is the repository for summaries of all financial transactions. cancellations.

such as call forwarding. 4. In many cases. These include requests for: ! ! ! ! Account status and amount outstanding Explanation of. It is imperative that the CSR establishes that the caller is bona fide.1 Other Systems That Interact With Billing Customer Care and the Call Centre From time to time. the first being security.PBI Media Ltd 2002 68 .1. or rejection of.The Book of Billing for Telecommunications 4 4. name or postcode). or Agents.1 Billing and Accounts Enquiries Having identified the customer. The normal practice of giving support to a reasonably large number of customers is through a Call Centre. the CSR must be able to respond to the most common billing enquiries. the customer will want to contact your company. Customers will wish to make contact whenever they want: ! ! ! ! ! ! ! ! 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. the Call Centre (or Contact Centre) is the only medium used by the customer for communication with the company. for example if there is a need to repair network fault or replace equipment. one or more call charges on the detailed call itemisation statement Payment history details Temporary alternative payment arrangements. offering immediate response and a single point of contact. Customer Service Representatives (CSRs). otherwise there is a risk of confidential account details being divulged. The CSR must also have adequate enquiry mechanisms to allow quick identification of the customer (for example from their CLI. in one single contact. and then have immediate access to the security code or PIN to minimise the risk of unauthorised access. © Jonathan Hart . react to customer requirements with the help of on-line information. This is not always possible. account number. The process must attempt to resolve the customer’s question to the best result possible. The CSR should answer the customer’s questions. attempt to complete the necessary action him/herself. 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. recording contact details and the nature of the requirement for further action if necessary. or at least initiate corrective action by others that will resolve the problem – and be confident that the back-up process will ensure that action is taken. A number of issues are important.

The Book of Billing for Telecommunications

4.1.2

Order Management

With the support of an Order Management system, the CSR can capture details of a new customer order, triggering the process steps to deliver the product or to commission service access. Ideally, the CSR support systems are integrated to the extent that details of the customer order are sent automatically to the various other system components dealing with fulfilment, service activation, billing and engineering installation, as necessary. Ideally, your order completion time should be sufficiently short that there is little need to allow for anything other than new orders or service cancellations. However, it is reasonable to expect the customer to change their order before delivery and activation is complete, so your process should specify the rules as to what changes are allowed without charge, or what charge should apply. The rules may get complex for product bundles and packages, but the process for dealing with various types of change (within reason) 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 the customer, to offset the cost of sale, lost business or installation costs. Whatever charge is actually levied must be forwarded by some means to Billing to include it on the next invoice. 4.1.3 Contact History

This is all about establishing a good relationship with the customer. Every time a contact is made it should be recorded so that the CSR has a clear picture of the history of events from the customer’s point of view. Every order, invoice or payment should be recorded along with every outgoing marketing call, advertising promotion, brochure, every incoming call, enquiry and in particular, every complaint – and who dealt with it, what was the outcome. This not only allows the CSR to know the sequence of events but also to assess the likely degree of customer satisfaction with our service – perhaps indicating how likely the customer is to churn to another provider or to upgrade their existing portfolio of our services. 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 competent individual CSRs are at dealing with customer problems. In order to keep the history viable, every contact must be recorded by the CSR (or by the relevant computer program for mailings). This has to be achieved as a matter of routine and 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 the resolution and ordering a new service.

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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 software

The customer will want to be reassured that a fault or problem will be addressed and resolved with minimum delay and inconvenience to him. From a billing point of view, it is customary to grant some form of allowance or credit to offset the problem, assuming the customer has in fact been inconvenienced. A record of the amount credited, the date and reason must be passed to billing to appear on the next invoice – or on a separate credit note on the next billing cycle. Depending on the size and degree of the problem, empowering CSRs to give a credit to a residential customer should be acceptable. On the other hand, a corporate customer may have negotiated a service level agreement with you, and will expect the terms of that agreement to be complied with – including penalties for non-compliance. 4.1.5 Problem Resolution

Operations management needs to review reported problems periodically to identify common or recurring features or trends. Problem analysis may point to network equipment failures, intermittent service problems, software errors or poor information design. Hence the CSR should be instructed to categorise and record problems in a form that can be analysed later. It is useful to categorise first according to the source of error details provided by the customer 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, or even that his service had been suspended due to non-payment of his account.

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The information from this analysis will give long-term benefits: being able to detect and repair faults more efficiently; having an instruction manual rewritten more clearly (and in the customer’s preferred language); or, selecting a more reliable equipment supplier when the contract is due for re-negotiation. Another outcome may be a need to redesign the 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 offer account credits in recognition of the inconvenience suffered by the customer. This means that the CSR has to have an interface with Billing to record the details for inclusion on the next bill. On resolution of a major problem, the reporting customer might be notified of the outcome – your prompt (and courteous) response could stop them taking their business to your competitor, so be grateful they informed you in time. 4.1.6 Customer Changes

It is important that the database holds the most up-to-date information about the customer, including mailing information, site locations, and bank or payment details. So when the customer contacts the company it may provide an opportunity to ensure the details on file are correct. However, there is a security aspect to consider – it is not appropriate to change details without being quite sure that we have the actual customer on the phone. It could be considered embarrassing, an invasion of privacy, or even a security breach to send for example the customer’s invoice details to another party. Maybe there are calls itemised with the invoice that should not be revealed. For that reason, some kind of password or security code should be agreed with the authorised customer representative early in the process.

4.2

Call Centre Systems

In order to maintain operating efficiency, Call Centre systems have to be effective in managing call traffic. This involves allocation of work, database information retrieval and updates, and presentation of information to the CSR. Thus the CSRs provide service on a multi-server queue basis, theoretically minimising the time a caller is kept waiting. Although the smaller call centre will operate very successfully with simple Customer Care systems, the larger contact centre will find economies of scale from use of sophisticated call traffic management systems including ! Automated Call Distribution (ACD) – allocates an inbound call to the next available CSR; also allocates outbound calls to suitably-qualified CSRs when traffic volumes permit Computer Telephony Integration (CTI) – recognises an incoming CLI and where possible retrieves customer details for the CSR before connecting the call; also retrieves customer history for outbound call campaigns Interactive Voice Response (IVR) – conducts an automated dialogue with incoming callers to pre-filter types of call to the most appropriate group of CSRs or deal with enquiries automatically through voice recording.

!

!

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

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PBI Media Ltd 2002 72 . 2. The general shape of the product or service is formed with an idea of the target markets.3 Product Management The ideal product management process starts with someone in the enterprise having a bright idea. and reaches a climax when the product is launched and used for the first time by a customer. it is necessary for Billing to be ready to invoice customers for the supply and use of that product. At that point. Market research A certain amount of intuitive and carefully detailed research has to be conducted to evaluate the likely number of customers. maybe even a competitor. at the published or contracted tariffs. Fig.The Book of Billing for Telecommunications 4.24 Product Management Process Concept Product Design Consult Marketing Consult Operations Consult Finance Consult IT Department Networks Customer Care Billing Bill Production Publicity Fulfilment Training Iterate with modified design? IT System Changes Review Unofficial process shortcut ?? Implement Rollout Monitor Performance There are several stages to the product management process: 1. the potential revenues and product image that will be attractive. Concept Someone has a bright idea for a new product. ! Prepare business case © Jonathan Hart .

The Book of Billing for Telecommunications

Based on the background research, the business case can be prepared and presented to management. The investment cost in terms of advertising and promotion, the internal infrastructure needed for product delivery, training and fulfilment is estimated together with assessed IT systems impact costs. The anticipated revenue spread over the case period 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, in terms of pricing and discount schemes, launch timetable, product content (new or existing features), marketing incentives at launch and so on. A detailed statement of capital investment or infrastructure changes necessary to support the product has to be prepared. 4. Consultation cycle: o Marketing Given the product design, does Marketing agree that the product should be launched as designed? Is there time to prepare the TV and media advertising campaign before launch? Operations Does Operations have the capacity to support the new product, in terms of Call Centre agents, systems performance and estimated process timings? Customer Care Is the Call Centre prepared to take on the extra product load in terms of staff training, information for customer enquiries, orders for upgrades or enhancements? Billing Are the individual programs in the Billing suite able to mediate, rate and guide the charges for the product CDRs? Can Billing operations accommodate the reference data load and testing of the new pricing structure and discount schemes in the lead time given? Bill Production Will the planned new promotion material fit into the production equipment? Is there time to arrange the artwork and printing of the brochures? Can the invoice layout support the addition of this particular product, at detailed and summary levels? Can the print vendor arrange to make the layout change ready and tested in time for launch? Fulfilment When the publicity material is printed, will it be ready for distribution at the Fulfilment house in time? Will there be an adequate supply of the free

o

o

o

o

o

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alarm clocks that are part of the promotion, ready in time? Is there a suitable packing and postage arrangement with the vendor? o Training Does the Training Department have enough information to prepare internal training presentations for all parties involved in the delivery and support process (sales representatives, CSRs, engineering, network operations, Billing, IT personnel, back-office staff, management)? Finance Are there adequate capital funds and cash flow available to invest in the new product for the duration of the project for its deployment? IT Department Are all necessary changes properly specified and understood? Can the changes be made and tested in time for Launch? How does the priority of currently approved changes in the pipeline affect this programme, and vice versa?

o

o

5. Review outcome, modify design and iterate the consultation process Having gained essential input information from the various departments, whether affected or not, it is now possible to evaluate whether changes need to be made to the 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 ensure there are sufficient resources – and that those involved accept and agree their responsibilities. 7. Rollout. This works fairly well in theory. Unfortunately, in the high-pressure telecoms world it is quite normal for the process not to be followed13. All too often, it consists of step 1, some of step 2 and then step 7. Then Operations has to pick up the pieces. Other steps occur later, ‘on the fly’ – generally after the product has been launched. It has been known that the first inkling one call centre had of a new product was when CSRs saw advertisements for it on bus shelters while on their way to work! It is equally unfortunate if Billing were not able to invoice customers for the product within a few days of launch or if Fraud Management 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 may well be a range of different switches and equipment types, so it is desirable to isolate the core systems from the complexities of the network, in a similar fashion to Mediation for CDRs.
13

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

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The SA system will accept business level transactions, usually from Customer Care sources, translating them into network management commands. The typical functions supported 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 commands to perform particular service activation tasks will become quite complex to manage. A side issue is the need for the system to respond in an appropriate timeframe for the command concerned – for example, it is not always practical to expect the system to activate a range of new numbers in real time while the network is busy.

4.5
4.5.1 ! ! ! !

Reporting and Management Information
Operational Reporting Management information regarding orders, revenues and event volumes by product and customer type Monitoring volumes of work, levels of complaints, faults, compliments, call centre statistics, usage patterns and distribution by product Information to Marketing regarding the success of promoted offers or the effectiveness of advertising campaigns Control totals of CDRs, minutes, megabytes and packets carried, revenues processed and collected for reconciliation elsewhere in the billing process. Data Warehouses and Data Mining

Reporting is required for a number of worthy reasons. These include:

4.5.2

The potential for reporting is limited only by the resources available and the imagination of the recipient. One solution to an apparently endless need for data analysis and reporting is to establish an entirely separate database containing a structured copy of all operational data, in a ‘Data Warehouse’ or a series of ‘Data Marts’. This will incorporate data in summary and detail form, about products, customers, CDRs and ERs, revenues and costs in a vehicle designed for high performance reporting and efficient response to on-line queries. The data selection and analysis process is known as ‘data mining’, because of the potentially immense value to be gained by the business from information extracted from the 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

© Jonathan Hart - PBI Media Ltd 2002

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Take the hypothetical average revenue per customer. in addition to the geographic data sourced from network and cell usage from the CDR and postcodes from the customer database. Either way. losing a customer is something that should not be allowed to happen by default. the estimated revenue lost over the next few years. and the result shows how much you stand to lose from churn.3 Churn Losing (and gaining) customers is called ‘churn’. 4. Losing a single customer because of poor service may not seem to have a large impact on the bottom line (unless it is a major corporate user) but a succession of losses will.PBI Media Ltd 2002 76 . Worse. and the value of good service takes a higher profile. All this information essentially relies on billing data – rated and priced CDRs. that lost revenue goes to a competitor. revenues. Churn rates of 20% to 30% and more are not uncommon. Make every effort to retain good customers. One measure of the value of a lost customer is the wasted cost of acquisition. there is universal acceptance by all operators and service providers of the importance of high-quality customer care. multiplied by say only half of the expected churn within all the customers you plan to have over the next five years. © Jonathan Hart . tied to the customer classification and type concerned. After years of indifference to the practice of “customer service”. 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. particularly in the mobile market.5. another.The Book of Billing for Telecommunications ! ! ! ! Demographic analysis of customers.

© Jonathan Hart . there may be pointers to customers who may be unhappy. Together with an analysis of complaints or payment amounts.The Book of Billing for Telecommunications For this reason.PBI Media Ltd 2002 77 . the billing database should be analysed on a regular basis for the signs and symptoms of potential candidates for churn. so offering alternate price plans may prevent them from churning.

of user training and hence User Acceptance Testing The Acceptance Criteria state the service levels contractually required for compliance with the Requirements. They provide the basis upon which the completion of the implementation project depends.PBI Media Ltd 2002 78 . but you thought that you meant to say so but didn’t14. in terms of functionality. before payment is made and the solution is considered fit for operational deployment The Testing Strategy defines how compliance will be measured. and of course they are competing with each other for your business. capacity and maintainability. If you do not have a clear statement of requirements. but it does start to ask the set of questions that result in the selection of an appropriate platform.The Book of Billing for Telecommunications 5 5.com © Jonathan Hart . It goes in a sequence roughly like this: ! ! ! ! ! ! Corporate strategy defines the products. in which systems supplied from the various vendors will be required to cooperate The Requirements Definition states what the systems must be capable of. performance. ! ! ! There are sufficient numbers of software vendors “out there” who would be delighted to supply. or Something Wider? One of the first problems to consider is. customer base. Working Practices (based on the process model) can be defined. Hence it is reasonable to suppose they compete by offering more interesting products. or better support. what exactly is the company looking for? It may be a facile question. against which vendors may propose solutions Once the systems have been selected. they cannot be held entirely responsible if their solution does not do what you wanted it to do. growth targets of the business Operational strategy defines how products and services will be supplied and how 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. 14 See: free White Paper 2001: Choosing a Billing System. more attractive prices.1 Choosing and Implementing a Billing System Billing Only. The Working Practice definition forms the basis of operations. Email: billingconsult@pbimedia.

Miscellaneous: Requirements for support. vendor’s corporate substance. and any operating system.2 Requirements Definition Requirements have to be defined in three main areas: ! Functional: This covers three main aspects: o Process. including process timings and volume specifications. escrow. customer and account data structures. Include all reference data sets Performance. middleware or hardware constraints.25 Principle of the Selection Process Strategy Process Requirements Procurement Gap Analysis Acceptance Criteria Testing & Results 5. product and pricing structures. o o ! Technical: These items specify the IT environment. Data. architectural requirements. Include all software interfaces. pricing and discount calculations. field specifications needed. © Jonathan Hart . competitive supply considerations – anything you require the vendor to comply with (subject perhaps to negotiation) ! One of the more important considerations is to present requirements at three levels: Critical. data manipulations required in order to support the various steps in the business process.The Book of Billing for Telecommunications Fig.PBI Media Ltd 2002 79 . existing system components that the new system is required to interface with. Mandatory and Optional. including entity/relationship models. with precise details. training. growth and capacity requirements. including all specific tasks. platform. algorithms.

PBI Media Ltd 2002 80 . Unless the package is heavily customised (when the approach takes on some aspects of the Build option). depending on the extent of local customisations needed.3. but non-compliance may require customisation or some other acceptable compromise. Build or Outsource? One of the selection decisions is whether to Buy. and non-compliance will immediately and automatically rule the vendor or product out of further consideration. Hence the products. packages and discount schemes you can offer may be available elsewhere in the market (albeit perhaps not at the same price). 5. There are. as it were. Having the operation in-house implies a need for you to recruit operational and support personnel. you will probably end up using a version of the vendor’s software that was built some months earlier and specified months earlier still.1 Buy This is where the operator buys or licenses a software package. together with taking responsibility for their training. Perhaps you will have to set up an IT department to implement some local customisations. ! ! Set the rules and stick to them – and it helps to know before entering negotiations with a vendor whether a requirement really is a Requirement or is an item on a wish-list. 5. This tends to be the most common billing solution. and you tend to get a higher level of functionality than for inhouse developments – more ‘bang for your buck’. and your bill presentation facilities will not be unique. Develop. so selection can present challenges – and delays while you verify various claims made by the vendor. Even if you are careful with your requirements. for operation in-house. ‘Mandatory’ means you want it. several hundred current billing packages that potentially offer a solution to your billing requirements. Outsource. however. it is possible that the system may be used by your competition – this may or may not present a problem to your Product Management or Marketing people.1 Advantages • A product version would normally be available immediately to get the operation started quickly 15 See: PBI Media Report 2000. welfare and management. It is certainly advisable to have your own testing team to undertake acceptance testing. © Jonathan Hart . Build or Outsource the software15. 5. a system from a vendor or software house. It helps to understand the company’s strategy before making the choice. don’t let the vendor “mark his own homework”! The Buy investment is potentially lower than for Build. offering short implementation time scales and a system that has sometimes been tested and used by other telecom companies – ostensibly a lower risk approach.The Book of Billing for Telecommunications ! ‘Critical’ means that compliance is an absolute threshold.3.1.3 Buy. The vendor should normally amortise the development costs over a number of sales. ‘Optional’ means either “nice to have” or “the vendor will get extra brownie points for offering this feature”. investment requirements and risks vary widely between these choices. Build. The respective considerations for each are set out below.

should timescales. 81 • • • © Jonathan Hart .3. design and testing capability.2. some at high competence levels. You need your own IT department and internal specification. but thereafter cash flow would be at maintenance levels You will need to recruit and train operations staff and some level of in-house IT expertise. bundling and discounting features.3.1 Advantages • • • • The solution would normally be tailored precisely to your requirements. to manage the operation on a day-by-day basis Your systems functionality and presentation capabilities will not be unique in the market. design or development As for Buy. One example was an Italian mobile operator. services or discounts and differentiated customer support that packaged solutions may not offer. but the result will be unique. The company’s best investment choice was to develop an ultra-high-performance bespoke solution for the core rating and billing engine. reducing the risk The development investment tends to be spread by the vendor across a number of customers. Ultimately. but was able to retain many other components of the package that that were less critical. It usually involves a longer lead time and maintainability issues downstream.2.3.2 Disadvantages • A major investment is required for IT design and development staff. 5. capacity and performance The software would offer unique features and differentiators (note the original unique impact of ‘Friends and Family’) Overall costs and lead times may be comparable to (or even lower than) heavy customisation of a package The life of the system may be expected to be longer than for Buy. experiencing such a massive growth rate in numbers of customers and CDRs that it predicted only months to reach the outer capacity limits of their package.2 Disadvantages • • • There is an initial investment required for servers and software. Build 5.1. albeit at average skill levels. building a solution may be the only approach. reducing the cost of delivery of billing. comparable to Buy solutions involving extensive customisation.3. as well as a need to retain and motivate them for ongoing support and maintenance tasks There would be an investment in development computer facilities as well as operational platforms There is a high but manageable risk of failure. but presents an opportunity to offer unique products. even customised for performance. from accidentally poor specification. Rapid application development techniques can mean that in-house bespoke solutions will be delivered in acceptable lead times.The Book of Billing for Telecommunications • • Other companies will have used and proven at least part of the software. 5.PBI Media Ltd 2002 .2 This approach implies you will use your own IT department expertise to design and develop a bespoke system solution. exactly tailored for your requirements. 5. performance or capacity constraints of standard packages be reached. you will need to provide and train operations staff to manage the operation on a day-by-day basis. including product pricing.

PBI Media Ltd 2002 82 . [Apologies both to Bureaux. cover at weekends and holiday periods. 5. they employ the operational. running your systems on their computers. you may not be able to manage it externally (and vice versa). perhaps while you evaluate market response to a new product or pricing scheme. Unlike an in-sourced approach. response times to correct problems. whereby an external supplier owns the operational computer systems and provides a billing service to your company. it is viable if it is convenient. output delivery deadlines. The first is the traditional Service Bureau model. responsibility for errors. where they run their systems on their computers. there would need to be a direct. generally based on billed revenues and volumes. highperformance data link between your network switches and the outsource partner’s platforms. examine the data) while the service is in process). The second type is the Application Service Provider (ASP) model. but running costs will tend to be higher (to cover the supplier’s investment). however. Outsourced Billing – Market drivers. Billing can be established 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. on your behalf (this might be analogous to a car valeting service: they take your car away. they do the rest.3 Outsource Outsourcing is a variation on the traditional service bureau concept. including: CDR collection cycles. Outsourcing is very convenient if you have a new product or service that is undergoing trial deployment. ASPs and car valeting services if the comparison is considered unfair]. outsourcing does not have to be considered as a long-term solution. on your behalf (perhaps analogous to a mobile valeting service. This is formed on the principle that if you cannot manage the operation internally. whereby you can see the car (or.3. There is a low capital investment required. Many companies believe you should have an SLA when dealing with in-house operations. You also accept the consequences of relying on another company for a critical core operation – not necessarily a bad thing. There are two main types of outsourced operation16. and at the same level of detail as that suitable for outsourcing. and ongoing charges are based on billed revenue. overall performance. This implies they invest in the hardware. although there may be long-term cost considerations. 16 See also: PBI Media White Paper November 2001. You feed their systems with the event records. IT and support personnel and you pay licence fees.3. models and pricing for development in Europe © Jonathan Hart . service it and return it in an agreed time to an agreed quality).3. or perhaps while you wait for the IT department to implement the billing changes necessary to bill for it. You must have a clear Service Level Agreement (SLA) with the supplier to cover all aspects of the operation.1 Advantages • • • • • The lead time to establish billing is about the minimum achievable.The Book of Billing for Telecommunications 5. This can occur at start-up. To achieve process turn-round times comparable to in-house operations. The billing system is already established and fully operational. and most importantly.

The streams are by no means independent. Data security implications for valuable customer records.3. This makes planning and sound project management two of the critical success factors. but might initially look as shown in the diagram. The sooner the billing system is up and running. A high-level view of the overall programme of work will have three main streams of activity: the Service Delivery or network management side of the business.2 Disadvantages • • • • • It may happen that the server is remote from the telco.PBI Media Ltd 2002 83 . the IT responsibility domain and Operations. the sooner that revenues can be collected for the business.The Book of Billing for Telecommunications 5. Many view this as high risk.26 Outline Implementation Programme Ops Strategy Process Def’n Acceptce Criteria Working Pract’s Build Training Recruit & Train CSRs User Accept Test Resil’ce& Perfmce Test Ops Ready Test Business Strategy R’qts Def’n Procure /Develop Systems Vendor Testing IT Strategy Build IT Infrast’r Install’n Test Integr’n Test Network Strategy Procure Network Build & Test Network © Jonathan Hart .4 Planning A common feature of billing implementation projects is an enormous pressure to get the project completed quickly. Fig. which should not in practice present operational difficulties provided it is a 24x7x365 service Tendency to be the least customised approach (although this might not apply to the presentation 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.3. 5. so the timeframe set by management is always less than needed under the circumstances. not kept in-house. The plans for each have to come together at the end.

it does not show the relative timing of the tasks concerned. testing activity needs to start from very early in the project: ! ! ! ! ! Do the process models logically and fully describe the main business activities? Are the Requirements complete and consistent? How can each Requirement be tested. and it varies from company to company. testing time is usually compromised – there has to be a balance between going live with faulty systems and loss of business through not going live. Fig.The Book of Billing for Telecommunications Whilst this diagram shows some dependency between the streams.5 Testing One problem with the logic of the plan outlined above is that Testing has to start sooner than at the end of Building.PBI Media Ltd 2002 84 .27 The Programme Plan Change management Strategy Programme management Process design Working practices Requirements & Acceptance criteria Procurement & Gap Analysis Development/Delivery Testing Training Acceptance and rollout 5. Note the importance of Change Management activities. It’s a matter of risk assessment. Because of the time pressure. In fact. 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? © Jonathan Hart . and even before the end of Process Design. The notional Gant chart gives a clearer picture of the more likely sequence of events. right from the start.

cosmetic or inconvenient. for testing? Thorough testing has several stages. since they define the expected capability and acceptable levels of failure to comply. Error severity is generally defined at three or four levels. For example: ‘for initial use. In this example. quantified in terms of numbers and severity levels of errors or points of non-compliance for contractual clarity. Acceptability has to be clearly defined. Acceptance criteria should be defined and applied contractually for any approach. 5.6 Acceptance Criteria The concept here is to define the basis on which you would be prepared to pay for and go live with the chosen solution. It is customary to define acceptance criteria in terms of specific functional or performance capabilities. but which does not prevent completion of normal work. © Jonathan Hart . ! ! ! What the Acceptance Criteria must state is the number of each of these that are allowed before non-payment or penalties apply. approximately: ! Severity One – the system is unusable and cannot handle normal workloads or deliver valid outputs or has a global scope error that precludes partial working Severity Two – the system has a major error or fault that prevents completion of normal work. the vendor could be an internal IT department responsible for development and delivery of the system: ! ! ! ! ! ! ! ! Unit testing (performed by the developer) – to confirm that each individual module is coded correctly Component testing (performed by the vendor) – to confirm each component or subsystem meets the design specification System testing (performed by the vendor) – to ensure all system functions are executed correctly Interface and Integration testing (performed by the integrator) – to ensure different systems elements interact correctly Resilience testing (performed by IT and operations) – to ensure recovery in the 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. but is localised so that the impact can be compartmentalised Severity Three – the system has a localised error that will cause it to produce incorrect output if processing were to run to completion but which does not prevent partial working Severity Four – the system has a fault that may be described as documentary. acceptability is defined as zero Severity One and Two.PBI Media Ltd 2002 85 .The Book of Billing for Telecommunications ! ! ! 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. no more than ten Severity Three and no more than thirty Severity Four.

and some considerations regarding the migration process. price plans and discount schemes Mergers and acquisitions – consolidating two or more billing databases from different source companies. Not a good start. Here are some of the challenges. the correct functioning should also have been previously defined. 5. for any fault to be classified as a given type of error. The need to identify faults in turn implies that a managed programme of testing will be undertaken.7. How do the individual fields compare? What will we do about the differences? Some of the questions include these: ! Data entities – Does the new entity/relationship model have anything like the same elements as the old? How do they correspond? Is the new model more or less restrictive in handling. Perhaps the source data in the old system was never subjected to the rigour of the validation mechanisms built into the new.” Thus began a telecoms conference presentation. in order to identify and track tests. In preparation for the move. the issues of selecting and implementing a new billing system were reviewed.The Book of Billing for Telecommunications Clearly. Even if the old system is still running operationally. either in the original Requirements or in subsequent appendices or annexes. or standardising on one billing platform Disposals – creating a new billing environment for selected customers and products Convergence (or divergence).000 feet and 500 miles per hour. only at 33. so at first sight it may be all unusable. but within the topic of implementation. Earlier in this chapter. there have to be basic reasons for the migration: ! ! ! ! ! Increase capacity and improve performance Capability to bill for new products. offering advice on how to approach migration projects. or in approved change requests.1 Data Challenges Of course. 5. for example. many of the problems boil down to the quality of the data. The full specification of an end-to-end strategy for software Quality Assurance (including vendor 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 or repaired. the real challenges of migration were not. we assume that competent data analysts have performed a detailed cross-mapping of old data fields to their new system equivalents.PBI Media Ltd 2002 86 . in turn implies that suitable incident management and IT configuration management processes are needed – but that’s another story. results and incidents (problems or faults).7 Migration Projects “Migrating a Billing system is like changing the engine on a Jumbo jet. customer account or product component hierarchies? Data attributes – Do all the old elements have an equivalent in the new records? Does the new have meaningful spare elements that can be used for the extras? Field and array sizes – Do the maximum old data values fit into the new? Can the old address line fit into the new? Are there enough address lines? ! ! © Jonathan Hart .

how will we reconcile old and new cycles? How will we compare data sets. 5. old data sets or in the old processes (as discussed under Revenue Assurance) that are not present in the new. can we explain and reconcile the difference? What is considered a satisfactory degree of consistency? ! ! There are several other reconciliation-related operational considerations: ! ! ! ! ! One of the many problems is that we will probably encounter faults in the old systems. Also the sequel survey in 2001 at www. In general.globalbilling. of which types (or entity types and instances)? And of what data quality? Have we run analysis and sampling programs against the old system (and the new. The competition is intense for experienced staff. right from the start of the planning process. bill run results and control values for confidence and audit acceptance purposes. so resourcing becomes a key function. or is the new range a subset/superset? Do old and new equivalent values actually have the same meaning or interpretation? If the new range is a superset. particularly regarding error corrections in the old data and modifications to auditable data values. Billing & Customer Care Skills and Salaries Survey 2000. financial and management information outputs to be compared? If we have a different result in the new system. It has also occasionally been known that the new system contained errors not present in the old system… For these reasons. before and after the migration? How are product reporting. the company has three options: ! ! 17 Permanent staff Contractors See: PBI Media Report: Telecoms IT. as the outputs from old and new will never match.PBI Media Ltd 2002 87 . if it already contains data) to confirm every one of our assumptions? Will we run the same billing cycles? If not. how is Marketing to get accurate geographic and demographic information from the migrated data sets? Does it matter? Do the old and new billing and financial controls have a direct correspondence? How exactly will we reconcile old system controls to the new ones during and after migration? How many records are there in the old system. and if not. a critical success factor. 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 the same naming conventions and abbreviations? Post codes (and other similar reference fields) – Did we originally check every address against its postcode in the old system.8 Resourcing One of the great challenges for a telecoms enterprise is the attraction and retention of good personnel17. it is essential for Audit to be involved all the way. This makes reconciliation particularly difficult.The Book of Billing for Telecommunications ! Content values – Do the field codes have the same range of values. It is vital that the acceptance of the new system is achieved with their full understanding and endorsement of the migration process.org (within the GBA’s Knowledge Bank section) © Jonathan Hart .

who understand IT and who will take the time to understand the problem you are trying to solve.3 Consultancies Using consultancies is another form of outsourcing. Being disposed of is supposed to be one of their operational hazards. you may find your existing permanent staff are not available. most agents being significantly unprofessional in responding to and managing contractors. Too many offer you glib stories of ‘expert recruitment personnel and a database of thousands of contractors’. they are more valuable elsewhere. you should be able to engage experienced specialist contractors with ease. 5. and in some cases the salaries needed to attract key personnel are high. The theory goes that contractors are disposable. The cost will usually be the highest of the three options.PBI Media Ltd 2002 88 . In return. If the systems you deploy are extremely successful in their own markets. Hence you will incur a steady overhead (and project lead times) for training.The Book of Billing for Telecommunications ! Consultancy firms In practice. 5. a mix of personnel is most likely. Their contribution has to be carefully managed and continuously monitored. Their contribution should be frequently appraised and sincerely appreciated. The opinions expressed in this paragraph are based on a sample of perhaps 50 agents over a period of twenty years. Professional standards of contractors vary widely. but it is essential they are closely managed to ensure they remain fully productive – and never engage contractors on hourly rates. and are less interested in actually helping the client to address a shortage of expertise. provided there is a reasonable lead time. 5. so the selection process must be rigorous – do not be afraid to reject substandard contractors at any time. so certain roles may have to be appointed for lengthy periods – which can induce a measure of resentment from permanent staff. to both extremes. There are very few professional agents who understand the business of telecoms. particularly if the vendor is offering you a major new version. being already fully occupied on other essential tasks. there might be a shortage of contractors with previous experience of the product. Permanent staff can require high overheads. where in reality they are primarily interested in placing contractors as a commodity. because you have to pay for the project risk they take on your behalf as well as their overheads and profits. or they may not be experienced in the new software or technique.1 Permanent Staff When your new project comes along. but opinions vary on this. They use a ‘tick-in-the-box’ mentality for matching the contractor’s alleged skills against their view of what you require. otherwise they may not perform at the speed or skill level of an experienced person. Check carefully to ensure the contractors have actually worked where the product has been installed.8. They are not much help to the contractor either.8. There is a risk of dependence on contract staff. © Jonathan Hart . they mitigate the risk.8. Permanent staff are generally thought to be the least expensive option. By the time a position is advertised. so recruitment and retention will always remain important. There is always a volatility factor – once you have trained them.2 Contractors In principle. The other issue arising from using contractors is the need for you to deal with Agencies. whereby responsibility for a defined piece of the work is given to another company. provided you have defined their terms of reference precisely. the requirement is distorted and diluted from what you want.

Then both parties share in the benefit of a successful implementation. One assumes this is done in the hope that senior staff will compensate for the lack of experience of the juniors.PBI Media Ltd 2002 89 . There are other models whereby the consultancy offsets a part of their fees against shares in the client business. they do and it does. respectively. that the client won’t notice anything and that lack of business knowledge doesn’t matter if the consultants’ methodology is good. after all. © Jonathan Hart . Interview every new member of their team – you are paying.The Book of Billing for Telecommunications It has been known that some consultancies use under-experienced staff to fill out the resourcing of their client projects. Unfortunately they don’t.

Surveys of customers’ use of itemisation found that in practice they do not always wish to access all the details – only on doubt or dispute. thereby enabling negotiation of more competitive rates over those routes. providing the information may not always benefit the provider. The web presentation of the itemisation data becomes a valuable tool for marketing – as well as a potential differentiator for the customer. unwieldy and impractical. The next obvious step was to provide itemisation on electronic media.PBI Media Ltd 2002 90 . File transfer to deliver the itemisation detail file is not the simplest and safest means. then the law and the business are both satisfied. Several EBPP products. Hence. with no loss of customer service quality. This can be easily overcome by sending the ‘original’ paper invoice somewhat after the ‘copy advice’ is sent by email. perhaps when the invoice total was significantly different to that expected. (perhaps with a discount incentive). Call itemisation led to multi-page statements. permitting the individual to have clear visibility of unit call pricing accuracy. to find exceptions. The second challenge was security. to locate unauthorised usage. and so on. Customers were able to see and validate how their invoice had been derived from their usage. The customer could then study and analyse the data according to any convenient formula. Customer management needed to allocate costs. call itemisation was seen as a major benefit. One outcome of such processing can be that the customer is able to identify their most heavily-dialled destinations. In many countries it is not legal to send an invoice via email – a paper copy is required to meet the needs of taxation and audit laws. to assess the performance of different sales employees against telephony usage. Processing the detail was a different matter entirely. What was required was an entirely electronic means of sending the invoice and itemisation data to the customer. The fact that it is easier for the customer to authorise payment by email to internal cost centre management is also a benefit to the customer as well as reducing payment delays. and EBPP Vendor Profiles © Jonathan Hart . This delivered real usability benefits to the customer. Provided the customer agrees to pay when advised in this way. In this way the customer – or their cost centre managers and authorised personnel can have access and process the itemisation data for any useful purpose. Use of email and making the itemisation file available on a website are not entirely secure.1 Recent and Emerging Changes in Billing Practice Electronic Bill Presentment and Payment (EBPP) When first introduced. allow powerful end-user selection. initially floppy disk but usually CD-ROM. The solution was to offer encrypted attachments to email the invoice. The bill provided an audit trail. In some cases.The Book of Billing for Telecommunications 6 6. 18 See: PBI Media 2001 Report: EBPP – The Market Opportunity. using webbased billing platforms. and to provide the customer with access to their data on a restricted basis through a secure Internet website. manipulation and analysis tools. This minimised invoice preparation and distribution costs as well as shortening delivery lead time. The first challenge was legislative18. but perhaps the customer will appreciate the information value and will be less likely to churn. larger corporate customers received several boxes of stationery.

and partly to give the customer greater flexibility. This permits the customer great flexibility to maintain their own choices for call barring and service selection – and at a time of day convenient for them. The customer is usually provided with facilities to enquire about account information and view call itemisation details. Less incoming calls means that less CSRs are required to service them. typically monthly.The Book of Billing for Telecommunications 6. this allows the customer to make their own enquiries and keep their own records up to date. CRM to CMR – a paradigm shift in customer Also: PBI Media Report 2002.3 Hot Billing and Real-Time Billing The typical operational billing cycle produces invoices for the customer once per period.PBI Media Ltd 2002 91 . It has been recognised that encouraging more transactions to be conducted by the customer without using the call centre has a significant impact on reducing the total number of CSRs required.2 Customer Self-Care Partly to keep incoming traffic down into the call centre. One of the key drivers for this initiative is the link between the number of call centre contacts and operating costs19. 19 See: care. There are several circumstances giving reasons to reduce this delay. an increasing number of providers offer secure internet websites for the customer to access their own billing records. This can be quite useful if the account holder is going on holiday and in the meantime perhaps does not want premium rate or international calls to be made by other members of the family. Provided the customer is suitably identified for security. Several operators have extended the website facilities to include product ordering and service management. CMR for the Wireless Industry © Jonathan Hart . PBI Media Report 2001. 6.

in both these cases. possibly based on previous account performance. The nearest equivalent existing examples occur with coin-operated and pre-paid services. Real-time rating is possible with newer architectures. It is feasible to apply a discount estimate or an allowance. In addition. assuming the switching systems have the rating capabilities needed to work out the value of the call. collection.The Book of Billing for Telecommunications from the customer wishing to receive an interim account. perhaps adjusted at period-end.3. mediation and rating).3. this type of fast-response facility is mainly used (where available) for fraud detection and alarm functions. often for only some of the total services or CLIs used. to an account in the process of being closed.1 Hot Billing The concept of ‘hot billing’ is to be able to present a bill to the customer on request. Used on a selective basis. Customer accounts for hot-billed CDRs do not normally benefit from product and service discounts. so the overall approach is usually more correctly entitled ‘near-real-time billing’. © Jonathan Hart . whereby the network systems check the remaining credit on call set-up and perform a rating function while the call is in progress. the generation of the consequential CDR and the CDR being made available to the billing system. whilst his remaining credit is debited as the call progresses. The overall RTB functionality is sought mostly for internet and content delivery services. This presents an impossible problem for conventional billing environments. the switch must have the ability to feed progressive debit data for the selected CLIs out to a bill presentment mechanism for guiding and display. it means that the customer’s account should be progressively debited during the call. In theory. which cannot achieve a real-time response because of the inherent delays built into their batch-oriented architecture. As things stand currently.2 (Near-) Real-Time Billing The concept of Real Time Billing (RTB) is that the customer is to be billed while the call is in progress. This service is particularly valuable for hotels and business centres – except where they use smart PBX facilities that perform the task locally. it is a more typical two or three hours later. This means that the NMS must recognise the request and treat the call and process the CDR differently to a normal postpaid call. this overall cycle can often be shortened. so it is generally considered easier to provide hot billing conditional on discount exclusion – a small cost in return for the facility. This approach can introduce complexities in the reporting and reconciliation process. There is still a finite external delay in presentment. If used frequently. at best to around 15 minutes of the call being completed – in practice. particularly for those discounts for aggregated usage over the billing period. However. this functionality would tend to overload the switch. 6. polling. and this should be visible to the customer while it happens. 6. The CDR thus rated has to be sent immediately to the billing environment so that it can be presented to the customer. There is a finite delay between the completion of the call. Sometimes the desired response time is measured in hours (hot billing) to minutes or less (near real-time or real-time billing). and another delay while the billing system is cranked up and an ad-hoc cycle executed for the selected account. the customer has explicitly paid beforehand.PBI Media Ltd 2002 92 . and the billing system has to be ready to process the CDRs concerned. This delay is an accumulation of operational batching steps (CDR generation.

Ordering travel tickets and pizzas are other examples. The range is limitless. 20 See: PBI Media Report 2002. for example. a connection has to be made between the customer’s computer and the Web. CMR for the Wireless Industry. plus charges for the duration of the whole session. If the carrier charges the customer for the call. Many new entrant owners from other fields. managing costs. the website. however. For example. the publisher or the content provider. the ISP may theoretically be able to charge the carrier a small amount. In the first stage. but this is not commonplace in view of the margins involved. a cross-flow of information is controlled by data protection legislation.4 Billing Convergence and Integration As the ownership of telecoms companies moves across the corporate landscape. are able to capitalise on their traditional corporate assets such as real estate. and the transmission protocol is converted to IP. by connecting soft drink dispensing machines to central computers. Billing so far comprises a recurring line rental to the end-customer. and the session commences. The ISP may additionally charge the end-customer for a recurring internet access fee or subscription. The computer sends the user log-in string that is validated if necessary at the POP. Knowledge of a prospective customer’s high utility usage or poor past performance as a debtor. on the basis of a voice call connection to the ISP. rail and road networks as well as utilities. customer base and distribution outlets.The Book of Billing for Telecommunications 6. but the customer has to be willing to purchase. offering products and content over mobile services20. commerce and customer relations for the mobile industry. whereas the internet uses packet switching and a different transmission technique (Internet Protocol or ‘IP’). can be valuable indicators of potential performance of a customer when attracted to the new telecoms offering. such as power distribution. or the ISP may choose to offset that fee against revenue from advertising. the internet service provider (ISP). Innovative types of event are increasing both in incidence and diversity as ‘m-commerce’ takes hold. 6. the telecoms carrier. At the POP.PBI Media Ltd 2002 93 . the modems make the handshake connection. In several countries. innovative services are combining the convenience of mobile telephony with other types of billable event. Whether the call is actually billed at retail to the customer or at wholesale to the ISP depends on the carrier’s contract with the ISP. A typical customer is connected to a digital voice network using a circuit-switched connection. This means that there is an increasing interest in integrating the telecoms customer database with information from the traditional base. The particular interest depends on whether one’s perspective is representing the customer. To connect the computer. assuming that it has facilities to look up one-time charges for that event type. and the charge is added to the telephone bill. a voice call is placed to the most convenient Internet Service Provider (ISP) at their Point of Presence (POP). along the lines of interconnect. there is an increasing collaboration between other industries and telecoms. © Jonathan Hart . Increasingly.5 Billing for Internet Services This is currently one of the more active areas for discussion. a call to a number associated with a particular machine triggers the machine to dispense a can. Billing only has to cope with an additional type of event. The basic relationship model is shown in the diagram on the next page.

6. having to register or pay a subscription fee.The Book of Billing for Telecommunications Fig. but it is unlikely that either ISP or carrier can charge a commission to the web site for such transactions. which is generally many times more valuable than the access charge to the customer. the credit card company receives a commission on the sale. through an essentially external transaction via credit card. which has goods or services to offer. They are in a position to control the customer’s access to internet transactions. The customer may face another restriction as part of the site service offering.6 3G and UMTS: Charging for Content In this model. assume the end-customer has navigated to a typical commercial website. by fax authorisation) or through a secure site with encrypted data protection. Neither the carrier nor the ISP has any awareness of the external credit card transaction. depending on the site. provided directly (for example. a point of presence to the world-wide web and the point at which the customer’s account identity and security codes are checked. The customer can be billed for the goods indirectly. 28 Basic Internet Charging A ccess C harge? Service C harge? O r C om m ission? SP / PT T PO P ISP Site IP N etw ork G oods/Services? C redit C ard? The service provider offers a portal into the internet. This situation remains unless the ISP and web site owners have a close relationship and the customer’s origin can always be linked to a given sale. The end-user may be the customer or their delegate (e. and may or may not charge for this service. the carrier provides the means for the customer to have a wide range of telephony services. with an emphasis on having access to value-added service content.g. the customer has unrestricted access to the web unless a filter or screening mechanism is provided by the ISP. because they are essentially unauditable. an employee or family © Jonathan Hart . Meanwhile. As usual.PBI Media Ltd 2002 94 . a service charge is more usually applied if advertising has a lower profile with that ISP. Through that portal.

29 UMTS Role Model Payment VASP Billing Subscription / Subscriber Payment Subscriber SP Usage Payment Delegation of Service Usage Accounting Delegation of Service Usage Payment User Net Operator Billing Payment Source: UMTS Forum The carrier traditionally invoices the customer a recurring charge for access and call charges for the time connected. but could be responsible for incurring many of the charges by using the services or accessing the content. so the end-user may not be the one receiving all the invoices. the billing model becomes quite complex: Fig.PBI Media Ltd 2002 95 . per packet or per megabyte. it is as yet undecided how to charge for data calls. Given the ‘always-on’ nature of the UMTS connection.The Book of Billing for Telecommunications member). When the additional entities are taken into account. Some parts of the connection may be absorbed by the ISP – it partly depends on the nature of the data being transmitted. then voice calls will probably be provided for a nominal cost or even free. So where does the “real” transaction leave the other participants? Working backwards: ! The telecoms operator at best receives a fee for the amount of data transferred and can allocate a tiny proportion of the recurring access fee from the customer to the actual transaction. Data connections may be charged along the lines of existing 2G (second generation) data services. The UMTS Technology and Billing Challenge © Jonathan Hart . Because the percentage of traffic taken up by voice calls drops dramatically compared to data on UMTS. they receive a fee only for 21 See: PBI Media/Siticom Report 2001. At worst. The challenge to billing will be to sort out the different events and work out how much to charge for each event and to whom21. and partly on the direction: an upload is not expected to be either as large or as valuable as a download.

! ! Even if the ‘goods’ are an MP3 music clip or a video or photo downloaded to the customer’s computer. 6. then the Billing industry will continue to research ways to bill the customer directly for the services. The website pays the wholesale rate for the goods to the publisher or wholesaler The publisher pays a royalty back to the originating manufacturer. The industry is still trying to devise content protection and encryption schemes that limit end-use solely to the customer. author or artist. Quality of Service (QoS) pricing does not present an issue: the customer is offered better quality services for a higher price. This can however give rise to service degradation as network load increases.PBI Media Ltd 2002 96 . These services are valuable for high-quality videoconferencing and voice facilities.The Book of Billing for Telecommunications the call on a wholesale basis from the ISP. Small financial transactions for use of the software may best be handled by billing on the telephony account. where occasional packet loss is not as critical compared with data transmissions. but this is not resolved. some of the transmission protocols such as ATM (asynchronous transfer mode) are designed to allow shared use of a high-capacity circuit by several customers. a micro-billing charging model may be much more effective. may traditionally have been distributed on CD. there also has to be a link between the user and the customer. the operator receives the least part of the deal. If the service was a word processor. then determine how much to charge and to whom. As in the 2G access model described earlier. ! The ISP may receive a commission from the vendor (in this case the website). countered by restricting access to the publisher’s content library. so nothing can be tracked back to the customer’s telephone account without collaboration between all parties. then neither the ISP nor the carrier can detect it. perhaps on a tiered scale depending on volumes. The billing challenge remains the same: to recognise the chargeable event. convey it to the billing environment. for example. The originator may wish to modify their revenue model to reflect the ease of access by the end-customer. in the 3G environment. there has to be an auditable link between the user and the event. However. as another type of billable event presented on the telephone bill.7 Quality of Service Pricing In its simplest form. per spell-check operation or perhaps per thousand words. which may mean that the service level provided falls below that committed. for example. record it at source. perhaps on a sliding scale depending on strength. the charge could be per bullet and per soldier. The protocol is partly to make optimum use of the circuit and partly because each customer does not make continuous high-rate transmissions. but when offered on a website. Having enabled a high-value transaction (without telecoms the purchase might actually not have been made). That can be negotiated by recognising the captive market base of the ISP’s customers. © Jonathan Hart . A piece of software. the dependent IP address of the customer. as there is no difference between data packets containing music and data packets containing email. If the service was an on-line game. whereupon the customer becomes entitled to a reduced rate or a discount. then the basis of charge could be one billable event per accounting transaction recorded. If the service was an on-line accounting package. the charge could be per merged mail address. Until a standard protocol is defined that will identify added-value transmissions. Tracing the customer’s origin depends on the web site’s knowing the IP address of the ISP. There is no immediate evidence of the customer’s CLI by the time the IP packets reach the website.

Establishment of the billing environment usually involved a massive investment over a number of years.8 The Impact of Commoditisation As more and more trunk capacity is built over the same routes. and it will remain this way until more customers make more use of services that consume available bandwidth. Further. this means that service levels have to be continuously monitored on the network. Instead. and is increasingly seen as an expensive overhead rather than an investment. A different form of billing is needed to support the increased activity. 6. In many cases. If there is substantial spare capacity. attention turns to corporate efficiency and operational cost reduction initiatives. Once an enterprise is established. or for a larger number of shorter lease periods. the enterprise has at least one problem. In this way a sliding scale discount can be applied to the specific service for each customer according to those measures.9 Reducing the Cost of Billing It was traditional that billing capability was justified in order to be able to bill for the services that attracted the customers in the first place. competitive pressures drive down the charges – unless.The Book of Billing for Telecommunications For Billing.PBI Media Ltd 2002 97 . This means that carriers are forced to offer capacity at very low rates to get market share and revenues. of course. and perhaps only occasionally. in order to calculate the charges. there is an excess of demand over supply. increasingly on a commodity basis – perhaps at different rates according to spot demand for capacity. These involve process improvements. installing newer. as opposed to that used. the carrier will now have to deal with many customers. it is likely that the carrier will probably be supplying wholesalers or service providers rather than (or as well as) end-customers in order to maximise revenues. It soon becomes obvious that the investment in billing functionality and billing operations is disproportionately higher than for other parts of the operation. 6. a situation that was often billed simply from a spreadsheet. This leads to a new regime for wholesale billing. offering some service that gave competitive advantage to those customers – very often from the presentation and content of the bill itself. so new avenues are sought. billing will have to be provided with data regarding the capacity purchased. product and pricing rationalisation and migration away from inefficient and hard-tomaintain legacy billing platforms. supply is now exceeding demand by a substantial margin. Analysis of operational costs (including software licences and staffing) will enable an average cost per invoice to be derived. This is an important measure. covering many software components and hardware systems. because if the average unit cost per bill is greater than the average revenue per bill. more functionally rich and cost-effective software systems allowing the customer a greater range of choice in ways of dealing with the company. personnel development and expertise. Reducing the cost of billing is becoming an important initiative. It also means that billing has to allow the unit rate for capacity to vary widely per wholesaler and for unpredictable periods. Measures of transmission error rates and packet loss per customer have to be fed back to the billing system in order that actual performance can be compared against contracted levels. It was accustomed to having a small number of wholesale customers purchasing or leasing fixed capacity over extended periods. Operators are becoming aware that the substantial licence costs for mainstream billing software products have to be carefully justified. © Jonathan Hart .

a transmission protocol (or an Automated Teller Machine) Call Detail Record. An electronic link between two customers that is dedicated to their use for the duration of the connection (unless multi-drop). A computer system used in Call Centres that accepts incoming calls or arranges outgoing calls and allocates each to the next available CSR in turn according to a flexible set of rules Asynchronous Transfer Mode. the science of dealing with customer problems. (See also Packet) Calling Line Identification – how the network recognises an individual service instance (e.The Book of Billing for Telecommunications Appendix: Glossary of terms References to other glossary terms are noted in italics Description 2½G GPRS enhancements to 2G protocols that improve performance some way between 2G and 3G. Allows maximum use of available capacity by those customers. thereby being cheaper to implement than 3G Current mainstream “ second generation” GSM mobile technology. Ubiquitous large-capacity digital storage medium for music. supporting adequate voice and text message (SMS) services So-called “ Third Generation” technology supporting high performance.g.g. etc. general computer data. allowing (e. photographs. marketing effectiveness.) mobile video telephony Automated Call Distribution. CDRs. orders and requests in order to maximise customer satisfaction. high quality mobile transmission. company revenues. an Event) that allows tracking and billing to occur Compact Disk – Read Only Medium. based extensively on the same network elements as 2G. a computer record of all the data about an individual call (or in the broader sense.PBI Media Ltd 2002 98 . a domestic telephone number) A term used to describe the totality of network equipment and inter-connections operated by a carrier (or other business entity) that provides the customer with the means of ‘making that call’ A technique of numerically assessing the likely creditworthiness of potential customers based on their volunteered answers to various socioeconomic questions posed in their application for new services or a new account Customer Relationship Management. etc 2G 3G ACD ATM CDR CD-ROM Circuit CLI Cloud Credit Scoring CRM © Jonathan Hart .

Delivers “ the Internet” . A resilient packet-based transmission technique that divides up the data to be sent in order to maximise the number of different messages that can concurrently share a network (not their transmission efficiency). equipment. a development of GSM giving more speed to individual users for short periods Internet Protocol. now popular for mixed voice/data networks. Known also as CSEs (Executives) or Agents Computer Telephony Integration.The Book of Billing for Telecommunications CSR Customer Service Representative. usually at a switch General System for Mobile (originally something in French). the personnel responsible for responding to customers’ needs usually at a Call Centre (or Contact Centre) for any industry dealing directly with their customers. “ freebies” etc The point at which two different ‘clouds’ are physically interconnected. being on the one hand the duration of a single call instance and on the other.PBI Media Ltd 2002 99 . with an electronic payment transaction in the other direction such as by Direct Debit. generally used to refer to Internet transactions. Generic call centre term for linking database information with calls to help the CSR Electronic Bill Presentment and Payment – electronically sending formatted information about bills and accompanying detail to the customer. the bulk total of all calls in a given period from or to another network A compression method most widely used to minimise the data size (hence transmission time) of music or sound clips CTI EBPP e-commerce Fulfilment Gateway GSM GPRS IP ISDN Lockbox m-commerce Minutes MP3 © Jonathan Hart . Most European mobile services are GSM General Packet Radio Service. Integrated Services Digital Network A banking service (more common in the US) for accepting cheques direct into the bank rather than going via the payee The concept of trading using mobile telephony as a medium. perhaps benefiting from the network’s knowledge of the customer’s general location (See also e-commerce) A measure of time used as a quantitative basis of charging. (See also mcommerce) The preparation and delivery of items needed to complete the supplier’s side of the contract with the customer. The concept of trading over any electronic medium. including paperwork. by email or Internet web site access. mostly without human intervention (except for the buyer’s).

PBI Media Ltd 2002 . May be an amount of data or a soundbite from a voice call. collecting usage (CDRs) and problem information and dealing with soft maintenance issues A conceptual envelope containing part of a message being carried from one customer to another. for a fee The actual path taken across one or more networks by a call or data transmission The quality of the feature of an IT system that 100 NMS Packet Parameter PIN Platform POP Price Plan Process Process Definition Protocol PTT Reseller Roaming Route or Routing Scalability © Jonathan Hart . the computer system(s) responsible for controlling network traffic. “ priority” . A password code allegedly known only to the customer and the system or network and used as a key Computer hardware and software systems providing functionality to perform automated business operations Point of Presence. Network Management System. allows efficient sharing of the network by relatively slow traffic (see also circuit) A variable data item whose value directs the processing of a system component (e. Fine in remote areas with low usage.g. usually allowing any one of them to use the line at a time (notwithstanding eavesdropping). usually Government-owned provider of those services Purchaser of bulk capacity from telecoms carriers for resale at retail or wholesale at a margin The facility provided by a mobile service provider to the customers of another provider to send and receive calls on their network. to dial) to get access to a service provider. Where (usually. Telephone and Telegraph – the former established. “ payment method” ) Personal Identification Number.The Book of Billing for Telecommunications Multi-drop A traditional method of sharing a single phone line between a number of customers. such as Internet or indirect access long-distance cheap phone calls A set of prices and discount schemes for a group of products and services that may be offered to a defined range of customers for a period in time The steps that have to be taken to complete a business action The recording of a Process design so that personnel may be informed how to execute the steps in a consistent and manageable fashion The transmission technique or “ language” that allows two network elements to talk to each other and understand Post. to get somewhere else.

once upon a time charged with overtones of exclusivity for the buyer The carriage of voice or data traffic Universal Mobile Telecommunications System. often by an order of magnitude. next Grail for many vendors. beloved of mobile-phoneowning students. as a usually inexpensive way of sending short text messages to other mobile phones A recurring regular fee for access to a service or network.PBI Media Ltd 2002 101 .g. ADSL = Asymmetric DSL) SMS Subscription Transport UMTS xDSL © Jonathan Hart . without causing major chaos or massive re-investment Service Activation Sending an instruction to network management systems that will allow a customer to access and use a network service Short Message Service.The Book of Billing for Telecommunications permits or inhibits an increase or decrease in processing capacity. operators and providers. e. Imminent new “ 3G” ultra-high-performance “ always-on” mobile service. Movies on your mobile? Digital Subscriber Line (with several “ x” variants.

billing. 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.uk WHITE PAPERS • P2P Demystified – Introduction to technology and potential of Peer to Peer and Person to Persons 102 © Jonathan Hart .The Book of Billing for Telecommunications Tarifica services for Billing & CRM REPORTS IP and billing • • • P2P – Evolution. 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.co.PBI Media Ltd 2002 .

com © Jonathan Hart .PBI Media Ltd 2002 103 .com 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 methodology applied to your business Contact: mhhealy@pbimedia.The Book of Billing for Telecommunications • • • • • • • • • • 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 Asia Pacific 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: billingconsult@pbimedia.

The Book of Billing for Telecommunications © Jonathan Hart .PBI Media Ltd 2002 104 .

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