Prepaid, Evolved

Advanced billing is getting a new look in the age of convergence

In a converged world, service providers need a real-time billing system that quickly can implement the ideas the marketing department comes up with, supporting prepaid, postpaid and hybrid plans. As a result, the concept of prepaid billing is being made over as service providers are beginning to realize that prepaid functionality can provide so much more than simple service agility; it actually can make for entirely new revenue streams.

“We are really talking about bridging the back-office/ front-office divide,” says Dave McNierney, vice president of market development at Highdeal, which offers real-time billing solutions. “Next-generation prepaid billing architecture is the way to get there.”

CSG’s Kent Steffen

As the industry moves into a multiservice reality, carriers don’t know what customers are willing to pay for, or which segment will take which services. “So you need a real-time feedback system in order to make better decisions,” says McNierney. “The legacy for prepaid in North America is the credit-challenged, but now those systems are providing real-time visibility into the consumption of services.” That means service providers can mix or match services and do trials and pilots almost on the fly, taking some of the risk out of innovation.

Such capabilities open up immense new possibilities for the service provider, says Andre Gascón, vice president of information technology for Canadian cableco Vidéotron. “By putting all of the customer usage on the same rating engine, we’ll be able to offer new services and offers for our customers,” he says. “For example, we’ll be able to offer our customers a bundle of regular minutes along with long-distance minutes, where the customer can share them between the home and wireless phone.”

Openet’s Marc Price

The service flexibility enabled in a next-generation prepaid/real-time billing system — in Vidéotron’s case, it uses Highdeal Transactive — allows a much greater level of creativity. “Now we are able to launch new offers and new pricing strategies rapidly,” says Gascón. “We can mix our products and deliver new offers with our Web services. That is the biggest thing for us.”

It’s not just the carriers that benefit. Knowing, on the fly, how much has been spent, and on what, has attractive properties for consumers — and that in turn increases customer satisfaction. “Prepaid billing used to represent a business model to provide convenience to the customer and credit protection to the carrier,” says Kent Steffen, vice president of product management at billing vendor CSG Systems International Inc. “But the prepaid of yesterday is truly beginning to emerge as a strategic piece of the e-wallet of today. Consumers are demanding that they have choice and control over their services — voice, data, video, gaming, content, etc. Progressive providers are meeting this demand by giving their members options and tools to manage their billing relationships and that of their family members.”

Highdeal Transactive allows service providers to experiment with prepaid, postpaid and hybrid pricing and packaging models

For instance, service providers can offer e-wallet solutions to allow their members to manage the ways they pay — routing landline charges to a postpaid bill, say, or deducting credit from a prepaid balance, sending purchases directly to their credit or debit card, or even allowing them to manage their family members’ spending limits with personalized stored valued cards. This also plays well in businesses, which may want to allocate the number of multimedia messages or downloads that employees are allowed.

Going forward, third-party services, advertising and the tailoring of subscriber interfaces and experiences will put prepaid systems in high demand. “The ability to integrate with third parties and leverage the personalization trend is extremely important, but not well-understood,” says Marc Price, senior telecoms strategist in the CTO office of billing provider Openet. “”We are seeing trials today of these things as part of the prepaid or real-time system, but much more of this will be deployed going forward.”

Another new trend emerging with the introduction of off-deck mobile content is carriers taking on the role of trusted financial managers for their subscribers. “They can allow external charges to be processed through their purchase and billing solutions,” says Steffen. “This requires the service providers to have an additional level of sophistication in not only their billing solutions, but their product catalog, purchasing and settlement systems. Service providers are leveraging prepaid services not only as billing tools, but as a piece of the larger subscription management pie.”

Making this all happen is not without challenges. “The barriers are twofold,” says Price. “New networks, services and technology are making this more complicated. So while we can do this today, the operator still needs a network refresh to take advantage of it. Secondly, it’s institutional — most operators have seen prepaid as a special area and maintain a separate infrastructure, but now that needs to become much more involved with the network and other billing systems.”

Enabling convergence also requires an online tracking mechanism for not just calls, but also sessions to enable allowances, real-time updated balances, track reserved amounts and multiple concurrent activities. “The network’s the enabler, but it’s all about making money,” says McNierney. Nonetheless, prepaid will continue to be at the forefront of billing innovation as advanced services continue to come to market, he says: “Operators are being forced to move forward with enhanced and blended services, and they can’t do it without prepaid.”

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