Hello and welcome to the latest edition of Evolve from Cerillion Technologies. Only those living in caves (and we don't count many of them amongst the Evolve readership) will be unaware that the publication of the latest Cerillion e-zine coincides with the final exciting stages of the World Cup in Germany.

And while national football teams will leave Germany as they are knocked out of the tournament, Cerillion Technologies will be staying put. That's because we have just opened our brand new regional sales office in the German city of Dusseldorf.

In this issue of Evolve we talk with Frank van Gumpel, Cerillion's new Vice President of European Sales about his plans to drive forward our presence in mainland Europe.

Maintaining the football motif we also report that we have scored a pretty impressive goal of our own over on the Isle of Man. For those who may not know, Manx Telecom, which is a wholly owned subsidiary of mobile operator O2 and thus a part of the Telefonica group has become the first combined fixed and mobile telecommunications company in the world to gain BABT approval for its billing.

BABT stands for the British Approvals Board of Telecommunications and is a standard recognised throughout the world. It provides customers with the assurance that the billing and pricing for telecommunications services is absolutely accurate and correct. And Cerillion's billing software solution, as used by Manx Telecom, played a vital role in allowing the carrier to achieve its world first.

Also in this edition of Evolve is a close look at the pros and cons of multi-play services. The notion of the triple-play of bundled voice, TV/video and broadband has been around for a while now and, recently, with the addition of mobile to the mix, triple play has moved up another notch to become quadruple play!

Operators and service providers love the idea of multi-play as a fantastic way to lock customers in, increase ARPU and reduce churn. So they are all for it but more and more research shows that subscribers are far from convinced that multi-play bundles are what they want at all. This means carriers will have to look to their strategies – and be prepared to adapt them – if they are at all sincere in their pronouncements that "the customer is king."

Playing the multi-play game

The notion of 'triple-play' services – bundles of voice, TV/video and broadband delivered from a single supplier – has been around for a few years now. But since the announcement in the UK that cable and telecoms company NTL is to acquire Virgin Mobile, the hype has been building around a new model: this one is 'quadruple play', which adds the mobile dimension to the triple-play mix.

However, several recent research reports find consumers have very limited interest in receiving triple-play or other multi-service bundles from a single supplier. For example, according to Pyramid Research, most multi-service telcos are now selling only 1- 1.5 services per customer, whilst cable operators fare a little better selling an average of 1.5-1.9 services per customer. Thus it seems despite having the choice of proven triple-play propositions, many consumers are opting for single or double-play packages only.

So, even where operators can provide triple-play as an apparently attractive proposition – as bundled services from one supplier at a reduced overall cost per month – consumers are still not taking-up the offer in the numbers that were expected – or should that be 'hoped for'?

It is believed that one of the reasons for this is essentially psychological; it is the widespread customer perception that the receipt of one large bill every month is worse than getting several smaller bills spread out over a number of weeks, which at least allows people to juggle with payment dates. Another factor is the generalised understanding and belief that shopping around for individual components of a triple or quadruple-play offer usually results in subscribers securing better deals.

In fact, research shows that pricing of triple-play services is highly competitive and that the sums paid for contracting to several separate services is often considerably higher than the price of a bundle. This then may be a matter of educating the user base, but it is a different thing altogether where perceived quality is concerned because, in this regard, consumers have shown themselves to be pretty smart about how, when and where to spend their money.

Although not generally expressed as a direct part of the consumer proposition, one of the key benefits of triple and quadruple-play for operators is the expected loyalty / lock-in pay-back that comes with providing multiple services to each customer.

Here, operators and service providers are hoping that subscriber inertia – the "it's just too painful and difficult to switch to another supplier so I'll grin and bear it where I am" mentality, will keep churn down and subscriber numbers up.

This was of course the same attitude that many banks and building societies used to have – and that some still maintain. It is the old, and extremely cynical, "We'll make it too difficult for customers to move their mortgage and then we'll be able to keep them on the higher interest rate" ploy that so angers account holders.

And account holders are learning. They know that increasing competitive pressures and the growth in online accounts and comparison websites means it is now easier than ever to change a financial services supplier, and the same thing applies to telcos. These days, offering bundled services without ensuring service quality and the very best in customer satisfaction is a very dangerous game indeed. And with an increasing number of multi-play suppliers to choose between, the barriers to change are much lower than some might think.

There is no doubt that having a full suite of services in a portfolio provides telco and cable company marketing teams with the maximum number of options possible, but industry hype surrounding triple-play and quadruple-play only serves to obscure the constant need to segment the market effectively, and deliver compelling propositions to each customer group whether it be based on single-play, double-play, triple-play or whatever.

Given this, does it matter that multi-play telcos are only selling an average of 1-1.5 services per customer? Probably not.  Because that's just what it is – an average. The point is, and this has to be taken on board, there are segments of the customer base that will only ever have an interest in 1 or 2 main services, as well as other segments that see the benefit in a triple or quadruple-play bundle and, accordingly, will willingly sign-up for it.

The market is also segmented according to age, experience and technical knowledge. Thus the older generation continue to use fixed telephones both at home and in the office, whilst an ever-increasing proportion of the younger generation either do not have, or do not want a fixed telephone at all. They have grown up used to using mobile phones and simply cannot see the need for a fixed service. However, sometimes they have to take one as part of a bundle of broadband services (this happens surprisingly often) and rankles greatly with technically-savvy consumers. They will remember the additional expense and hassle and will move away when they are able.

The recent announcement from mobile operator Orange about "free" broadband with a mobile makes interesting reading for a while – until that is you stumble across the inevitable small-print pre-requisite that you must already have an active BT telephone line for which, of course, you pay line rental and usage separately. Similarly, Carphone Warehouse hit the headlines with its "free broadband forever" service. This sounds great until you read in the details that on top of the ubiquitous line rental there is also an obligation to sign up for a specific international calling plan. The fact is that the bundle behind the headline is rather less compelling than it appears on first sight.

In anticipation of upcoming competitive offers from Vodafone, and with new NTL / Virgin propositions also on their way, telco's appetites for more and more service bundling can only intensify. It is therefore essential that the carriers and operators equip themselves with back office systems that support their market segmentation and product packaging needs, and can manage the complexities of order management for bundled and unbundled services.

And, of course, the importance of the bill itself should not be overlooked. Clear communication as to the benefits of moving to a multi-play package, or the savings already being achieved can really help boost customer satisfaction – and there is no better form of advertising than customers promoting the service to their friends.

Take-up of triple-play and quadruple-play propositions are not going to change overnight. However, like it or not, convergence of services and devices means that multi-play is here to stay, and further consolidation along the lines of NTL / Virgin will accelerate this evolution.

Dominic Smith
Dominic.Smith@cerillion.com

Continued growth brings new office in Germany

On 1st June 2006, Cerillion opened their new regional sales office in Düsseldorf, Germany. Dominic Smith talks to Frank van Gumpel, Cerillion's new Vice President of European Sales, about plans for the office and growth in the region.

Frank van Gumpel started his professional career in 1989 with Digital Equipment where he held various positions in international sales and marketing until 1996. From 1996 to 1999 Frank van Gumpel was responsible for the EMEA sales organisation of LHS Inc., a supplier of customer care and billing systems and solutions. In 1999 he founded with partners a venture capital group, focusing on content and communications software solutions, which he sold in 2001 in order to join Vodafone. At Vodafone he was Executive Manager responsible for a division which productised in-house developed software solutions and brought those solutions to the market.

Q. Frank, you're new to Cerillion, tell me about your role and Cerillion's plans in the region?

A. I joined Cerillion to drive the expansion in the European Area. As we all know most of the operators in this region are still running legacy billing systems, which have been adapted to content based services by simply adding pre- or side-processing billing components into their architectures. Here we can see some serious replacement business coming up within the next years, and I believe that Cerillion is perfectly positioned to cope with the future demands of the operators in this region.

Q. Cerillion already have a strong customer base in Western Europe. How do you see the new office helping expand the footprint?

A. The new office is a base for our activities in the European region and is located in the heart of Telco activities in the European time zone. Based in Düsseldorf we are just minutes away from some of the leading carriers within the European market, such as Vodafone or Deutsche Telekom. Going into Amsterdam or Brussels takes us approximately 2 hours by car and all the other European Telecom hubs are reachable within a good hour of flight from Düsseldorf.

Q. With the growing use of low cost VoIP services threatening traditional revenue streams, how do you see the market evolving over the next 2-3 years? Should the Deutsche Telekom's of the world be worried about cannibalising their own revenues?

A. Speaking as a user of Telco networks I like to take advantage out of shrinking communication costs; on the other hand I would love to spend my savings on enhanced service levels and new services. For me it's not all about cheaper and commoditised services, it's more about having those services ergonomically working in my business environment and at home. If the Deutsche Telekoms of the world understand their customers' demands here I am not worried about them.

Q. What does this mean for the carriers' business support systems and how are Cerillion addressing these issues?

A. As customers demand more and more services from their carriers there will be more and more cost pressure on the communication cost within the networks. NGN will be an instrument to bring those costs down for the carriers. For the carriers business support systems it means that they will in the future not only have to compete on cost and more competitive tariffs, but more and more on service levels. We should also not underestimate the impact on interconnect billing here; where classical circuit switched carriers now need to interconnect to IP based transmission. This can offer dramatic cost savings which can enable more investment in managing and improving customer relationships.

Q. Will the consolidation in the market for Business Support Systems continue or will we see an even more heterogenous market in the future?

A. The two main developments in telecommunications technology in the past 15 years were the introduction of mobile and the introduction of content and IP services. Both did lead to new generations of Business Support Systems. We can see a comparable evolution in the networks coming up with NGN services and with the trend to CRM based Business Support Systems supporting true convergence. There is no more magic in the rating engines, as every vendor has a rules-based technology nowadays. The differentiator will be in the CRM piece of the Business Support Systems and in the capability to deliver true convergence, so there is room for new contenders. I strongly believe that Cerillion is very well positioned for both developments and will be one of the winners in the market during the coming years.

Q. Lastly, and perhaps most importantly, as host country for this year's World Cup how do you rate Germany's chances of lifting the trophy?  And working for an English company, who will you support if Germany end up playing against England in the final??

A. If both teams make it to the final there is a good chance for Germany to win the tournament based on what I have seen from them so far. On the other hand England has a team of outstanding players and if England would play as a team in the final they do also have a good chance of winning it.

Frank can be contacted at:
Kaiserswerther Str. 115
D-40880 Ratingen
Germany
T. +49 (0) 2102 420651
F. +49 (0) 2102 42062
E. frank.vangumpel@cerillion.com

Manx Telecom Secures BABT Approval Using Cerillion Billing Solution

London, UK, 7th June 2006 – Cerillion Technologies today announced that Manx Telecom, a wholly owned subsidiary of O2 and part of the Telefonica group, had become the first combined fixed and mobile telecommunications company in the world to gain BABT approval for its billing.

BABT – British Approvals Board of Telecommunications – is the standard recognised worldwide which gives customers an assurance of accuracy in billing and pricing for telecommunications products and services. "Gaining approval was a condition of our new Telecom license," commented Mike Dee, Director of Finance, Manx Telecom. "Cerillion's billing software supports all our fixed and mobile services and has played a vital role in us achieving this compliance."

Manx Telecom worked in close co-operation with Cerillion staff to evaluate the existing billing operation, and identify and correct any areas that failed to meet the rigorous conditions laid down by the BABT Standard.  By demonstrating that the bill production process achieved the high levels of accuracy and consistency required, approval was achieved in a comparatively short timeframe.

"By gaining BABT approval, Manx Telecom have once again shown their commitment to delivering the highest level of service to their customers" commented Louis Hall, CEO, Cerillion Technologies. "We are delighted to have helped them achieve this status, underlining the two companies' close working relationship and the benefits of providing a pre-integrated billing solution."

Cerillion Solution Focus: Managed Service Billing

Is your current billing system unable to support new services without continuous modification? Or is your cost of operation spiralling out of control? The Cerillion Managed Service can provide the ideal solution, integrating smoothly with your business processes and removing the headache of billing system operations utilising a dedicated team of billing experts.

Managed Service options include everything from end-to-end billing processes management to performing a specific pre-processing function, such as roaming or 3G event capture.

The Cerillion Managed Service provides support for the I.T., billing and print operations necessary to run a complete billing service. It is managed through a dedicated single point of contact ensuring that all services are delivered according to a Service Level Agreement (SLA). All work is supported by regular customer reviews to ensure the service is optimised for their business needs.

The standard scope of services includes:

• Service Operations, providing execution of normal billing functions (e.g. CDR take-on, rating, billing, payment interfaces, generation of reminders and reports)
• Print and postage of bills and correspondence;
• Help Desk, providing a single point of contact for all aspects of the service;
• IT Operations, ensuring the normal functioning of the infrastructure provided by Cerillion;
• Configuration changes, providing support for business process, tariff, format and reporting changes.

Many customers choose a managed billing service because of a lack of experienced staff, the need to launch new products and services quickly, or the need to manage growth. Over time such customers may reach a steady state or develop an in-house capability and so wish to transfer operations to in-house staff. Cerillion is able to facilitate such a transfer by providing training, hand-over and handholding periods.

The Cerillion Managed Service provides a full range of options to help improve your operational efficiency, maintain low and predictable operational costs, and get the most out of your billing assets. 

Talk to us now to find out how the Cerillion Managed Service can help your business to prosper.