Billing evolution and trends in telecom
The first billing system appeared in 1868. It was intended for mutual settlements between the telegraph service providers. At the same time, the system of deferred payments, or payments for used goods and services, gained popularity: invoices with detailed calculations were sent to clients. The present-day billing systems for the telecom market emerged in the 90-ies of the XX century.
Bercut Billing System v.1.0The billing system was developed and installed by Bercut for the first time at JSC Svyazinform providing communication services in the Chelyabinsk region. The IN@Voice billing system was responsible for accepting payments, issuing bills, charging subscribers for voice calls, SMS and Internet. IN@Voice expanded the IT landscape with two more telecom carriers from 2000 to 2002: StavTeleSot and Mobicom-Kavkaz StavTeleSot (now owned by PJSC "VimpelCom") included 61% of the entire subscriber base of the Stavropol region. CJSC Mobicom-Kavkaz, a wholly-owned subsidiary of OJSC MegaFon, provided services within the North Caucasus enlarged region.
The billing system solved several key challenges:
- continuous accounting for expenses on provided services;
- calculating costs, taxes and additional payments;
- managing and controlling a subscriber’s balance;
- notifying a subscriber of an insufficient balance;
- flexible charging;
- providing billing statements and financial reporting.
Even then Bercut billing system allowed not only issuing bills for the provided communication services, but also online charging for traffic. Obviously, the functionality was poorer than it is today: accepting a payment, canceling it and issuing a bill for a subscriber.So, how billing systems have evolved over the years? And how their evolution has affected mobile operators and subscribers?
Billing developmentsA paradigm shift in sales, with customer preferences in focus, provided impetus to developing the new IT solutions. They were intended to collect and analyze data on end-users and to develop products tailored to consumer needs. The needs of a mobile operator itself became less important.
Initially, all communications service providers (CSP) utilized offline billing that involved specific CDR files for data exchange between network devices and billing systems. A billing system applied charges to a subscriber’s account once a service has been provided. Over time, subscribers became more demanding. They wanted to view their account balance here and now. Therefore, billing systems had to learn how to charge sessions online.
Dividing traffic into types
Internet accessibility gave rise to a variety of traffic types. A billing system needed to adopt to those types so that it could charge separately for YouTube and WhatsApp traffic, for example, or not to charge at all. Therefore, service packages became even more personalized, and mobile Internet users began to pay for traffic with no waste of money. In particular, some solutions appeared in the telecom market such as messengers with unlimited traffic.
Subscriber fee charging
The model of subscriber fee charging has also become more flexible over time. Previously, the billing system charged money from a subscriber's account once a month. Then it became possible to specify periodicity and frequency of charging. So, mobile operators were able to offer more convenient payment schemes allowing subscribers not to pay for periods in which they did not use the services.
For example, if a subscriber activates a service on the 15th day of the month, the fee is charged off exactly on the 15th day of the next month. Earlier, a subscription fee was calculated beginning at the first day of the calendar month regardless of actual date of service activation.
Subscription fee clearing methodsAt different times, various methods of subscription fee clearing were used. A mobile operator used to select an appropriate method according to a service consumption model and mobile operator’s goals. For example, a postpaid subscriber had to pay after a service was provided. This popular method was replaced later on by an advance payment made at the beginning of the period.
A billing system once calculated and charged fees only for the days of actual service usage. Then subscribers began to pay monthly regardless of whether they actually use the service or not. It became possible to scale a subscription fee depending on duration of service use.
For example, a mobile operator offers to activate the service that is charged on the first day for the full period (calendar month), but the subscriber activates it one week before the end of the previous month. As predefined by a mobile operator, the billing system scales a subscription fee. It applies charges only for 7 days of use and, therefore, saves a subscriber's money.
All information necessary for the correct clearing funds from the subscriber's account (tariff, usage period, etc.) is stored in the billing system. IN@Voice analyzes data and decides on a due date and an amount of charge.
Mobile operators, in time, focused attention on the customer experience. The concept of Customer Experience (and User Experience) was introduced.
The Сustomer Experience times
Customer experience is a totality of senses, emotions, and feelings of a consumer when he or she interacts with a company that provides a service or delivers a product.
Mobile operators began offering subscribers additional bonuses and discounts for certain actions or specific services. For the first time, a bundle has appeared.
Minutes turned into bundles
Fifteen years ago, the pay-as-you-go (PAYG) charging was widespread. Everyone paid for a number of minutes actually used over a certain period. For example, the first 10 seconds and then 5 seconds of a call were free of charge. That is why many subscribers needed to comply with such a time limitation to save money.
As bundled rate plans appeared, subscribers began paying a certain fee for a selected traffic volume within a predefined period. Since then they did not have to check their balance after each call — the main thing was the available volume of resources in a package. The PAYG charging has changed to a bundle.
The emergency of the OTT services (Over-The-Top) resulted in perceiving a mobile operator solely as a data pipeline. At the same time, the struggle for subscribers continued. This required the implementation of even more attractive solutions. That's when the idea appeared of rolling over unused traffic from a previous billing period to another one. For this purpose, we had to implement new features in IN@Voice so that to provide the new functionality for providers. That is how the unique Tele2 Market service was launched in Russia, an online platform for selling unused minutes and gigabytes from the subscriber's service package.
Mobile Number PortabilityWhen the penetration of mobile communications exceeded 100% (in Russia it is now more than 170%, i.e. almost every subscriber has two SIM cards), we realized that the market is over-saturated and further growth should be recognized in surplus. In this case, it was more reasonable to retain existing subscribers than to attract new ones. Especially as there were reasons for subscribers to switch to another mobile operator. As often happens, one of those reasons was incorrect charging. However, subscribers had to deal with inconveniences to retain a good old phone number. The year 2013 proved a crucial for the Russian telecom market. Subscribers have been given the legal right to retain their phone number when changing to another mobile operator. The new service was called Mobile number Portability (MNP).
Communications service providers, including Tele2, had to look for a technology solution that would enable the MNP implementation. In record-breaking three months, Bercut managed to overcome this challenge with IN@Voice, the BSS platform. According to the Central Research Institute of Communications, 4 million Russians switched to another mobile operator with their old number retained in January and November of 2013. The phone numbers mainly (27%, i.e. more than 1 million) was ported to the "T2 RTK Holding" network (Tele2).
The abolition of "mobile slavery" showed that the saturated market is not an obstacle to the growth of a subscriber base. Thanks to MNP subscribers were able to easily switch from one operator to another. This provided for mobile operators yet another impetus to fight a subscriber flow. The point is that, according to the legislation, each mobile operator is assigned its own range of subscriber numbers. When a subscriber switches to another mobile operator, a donor operator loses that number. A number capacity decreases, thus badly affecting revenues.
Decreased number capacity and high expenses on attracting new subscribers forced communication providers to retain their clients. As a matter of fact, retaining a subscriber is much cheaper than attracting a new one even with discounts. Once mobile operators had realized this fact, they started to personalize their products. That is how the new services appeared:
- Tariff plan constructor that enables a subscriber to specify a desired traffic volume.
- Personal discounts.
- Exclusive offers for specific subscribers at a specific time, etc.
Such services are developed within the billing system jointly with the rating platform. The approach of applying discounts stored in IN@Voice to the entire subscriber base is no longer in demand. Therefore, the billing system evolves towards personalized offers. However, it is important to maintain the system manageability without adding to the volume of data stored and to the complexity of the system. After all, to add a service for one subscriber, just in three clicks, a large operator with a subscriber base up to 80 million has to click for 240 million times.
Along with personal discounts, roaming offers also developed. Previously, a billing system continued to charge for roaming during several months after the subscriber returned to the home network. This was due to a lack of online roaming. The subscriber’s actions on the guest network were recorded into a TAP file (Transferred Account Procedure) and then transferred to a home network. Mobile operators exchanged TAP files, cleared a subscription fee and performed mutual settlements.
Over time, the online roaming via CAMEL protocol has developed. This made it much easier for a mobile operator to communicate with a subscriber and with roaming partners. The postpaid method of charging faded away. Now a service request is delivered to the home operator immediately at the moment when the subscriber performs an action.
Content generated by providersIt would appear that subscribers received pictures via SMS not so long ago. Such content was delivered by using CPA solutions (Content Provider Access) that were necessarily integrated with billing. In Bercut, the SPACE solution was used. SPACE provided content providers with access to the billing system and enabled preventing subscriber’s fraud.
Provider content has changed significantly in a couple of decades. With the advent of smartphones and direct access to the Internet, each subscriber can now easily find and download any desired content. Today, demand is driven by more comprehensive offers: subscriptions, traffic tickets checking, sports betting and other services.
In the pre-IPhone era, it was impossible to make a call without a SIM card because the GSM network connection was necessary. The advent of a smartphone with an Apple ID that enabled making calls via FaceTime or iMessage, left mobile operators aside. The rapid development of messengers resulted in a decreased cost of Internet traffic, and this in turn increased data consumption. Subscribers switched to chatting in messengers via Wi-Fi.
In 2007, the iPhone appeared. Apple Inc. became a pioneer that excluded a mobile operator from the communication ecosystem.
In search of additional revenue sources, communications service providers shifted towards partnerships. For adding value to their services, mobile operators began to introduce the so-called benefits in tariff plans: free coffee at food courts, books in electronic libraries, subscriptions to online cinemas and paid video channels. IN@Voice inevitably faced a new challenge — the need to keep accounting and charging for provider content and services. The system had to learn how to notify a provider about service activation, applied charges or subscriber blocking for some reason.
Developing the IN@Voice partner programs required a powerful API (Application Programming Interface) to provide for easy management, billing access levels and protection of subscriber personal data. Ecosystem involves many products from the IT landscape of a mobile operator that require information from billing: campaign management, personal web profile, M2M platforms. That is why the API is still evolving to this day.
Subscriber securityThe billing system is subject to strict requirements for subscriber’s personal data security and storage. The information security is largely controlled by mobile operators. The IN@Voice billing system is installed on the server within the local network of a mobile operator. This allows excluding access to it from outside. Additionally, we use firewalls and strict access control based on the role model implemented in Bercut IN@Voice. It regulates a set of permissions that a user or a group of users needs to perform certain tasks. A mobile operator can set permissions and roles according to its access policy. All user actions are logged, and a security team can do a full check any time.
There are no alternatives to a billing system. One way or another, a mobile operator creates a software product by means of a billing system, while a network only provides access to subscribers. If you need to account for numerous subscribers, services, various types of traffic and bills, it's worth considering IN@Voice. For a traditional telecom operator, a billing system is a must-have element of its infrastructure that implements the key business processes.
IN@Voice breakthroughA truly breakthrough moment for IN@Voice was separating TAR@SCP from the billing system. TAR@SCP as a stand-alone system became responsible for rating all telecom services. This significantly simplified the IN@Voice system architecture, allowed optimizing processes in terms of functionality and speeded up software product development.
Bercut scaled IN@Voice and increased the system performance. We enhanced the functional capabilities of reporting subsystems. The Bercut product portfolio was replenished by Business Intelligence & Analytics Suite ― a toolkit for storing, building and evaluating analytical models, and, as a result, for making effective management decisions. In 2014-2015, Bercut performed a large-scale migration of 13 million subscribers from 20 Rostelecom sites to the Tele2 database.
Director of Product Marketing at Bercut