The Flat Rate Society adopts a rounder view

Welcome to the Summer edition of Evolve. Our theme, one way or the other, is all about pricing and billing. We turn the spotlight on the launch of Cerillion Express, a pre-configured and pre-integrated CRM & Billing solution which sets some new benchmarks on flexibility and speed to market. And we announce a multi-million dollar contract with The Bahamas Telecommunications Company Limited (BTC) to implement a fully convergent CRM and Billing solution.

In our reader poll last time we asked you about churn and one of the things we discovered was that pricing was the most important factor in whether you’d churn to another provider or not. So this time the poll asks about pricing - flat rate pricing to be specific, a theme also picked up by our main feature article.

In fact we think pricing is a hot topic. Time was when pricing issues were all about the good old yes/no argument between the flat rate approach of the Internet providers and the time - or capacity-based pricing models favoured by the telecoms industry. Today, both sides are using both approaches.

Meanwhile the flat-rate Internet community are heading in the other direction for the opposite reasons. Broadband providers are discovering that their flat rate pricing (which gives them great marketing simplicity) sometimes needs some extra controls and levers attached to avoid lumpy traffic patterns that screw up network performance.

As a result, broadband providers are trying a whole range of charging mechanisms to attenuate bandwidth-gobbling behaviour online, especially with the rising use of peer-to-peer file transfer. Their approach is to keep the basic flat-rate model that users know and love (radical pay-per-bit charging usually fails) but to add caps for bandwidth use, or to charge extra for the right to use particular, bandwidth-hungry applications.

It's still early days and both sides are still learning, but as we explore in this newsletter, event and usage based pricing - and the tools which enable it - will become increasingly important as our sectors converge.

The Flat-Rate Debate

As someone who has championed simplicity as being key to the success of telecoms services, I find the debate about flat-rate pricing a very interesting one. The arguments for simplicity are clear – easy to use services with transparent pricing can only be a good thing for the consumers. Essentially you know what using a service will cost and don’t expect any surprises when your bill arrives. In this regard, flat-rate bundles are the most straightforward approach possible, and over the last 10 years, companies such as BSkyB (Sky TV) have prospered with their simple subscription-based model.

However, the problem for the network operators remains the same – where is the value in flat-rate services, and do they then go down the slippery-slope to being a provider of the access network and transport only? This commoditisation is a prospect that sends a shiver down the spine of most operator shareholders, and it was all the more surprising that some of the keynote operator speakers at February’s Mobile World Congress in Barcelona dared to mention the dreaded “dumb-pipe”. Perhaps this was the kick-up the backside that some operators need to re-focus on building value in the services they offer?

Multi-play bundles

Over the last 3 or 4 years, IPTV has been built up to be a new service that offers a wealth of premium content and interactivity that can be justifiably charged as “value-add” to the consumer. However, earlier this month I was surprised to see a news report from Screen Digest that indicated as many as 40% of European IPTV subscribers receive their IPTV service free, when provided with a broadband or telephony service. This is a classic multi-play bundle, but where you may expect the broadband access to appear “free” in a bid to encourage use of chargeable IPTV services, it would seem the complete opposite is happening. Or at least that is what the customers perceive to be free.

The other side of this equation sees a huge growth in bandwidth intensive services, such as the BBC iPlayer. This was only officially launched last December, but its popularity has grown at a phenomenal rate, and now the broadband networks are straining under the increased load that this and other video-based services are imposing. And Ofcom, the UK regulator, is demanding that broadband providers must publish actual bit-rates achieved, rather than theoretical maximum rates. This business model has now been questioned to the extent that some UK broadband providers have suggested that the content provider (in this case the BBC), should contribute to the costs required to upgrade the broadband networks to support the increased load.

Interestingly, we also now have a situation where BT have announced they will be starting to charge for iPlayer content provided as part of their BT Vision IPTV service. This is quite a move considering the iPlayer content will remain free when accessed via the “normal” web interface. The only apparent difference is that BT Vision customers will be paying for the convenience of accessing the iPlayer content via their set-top-box and television.

Usage-based billing

The flat-rate broadband packages are really where the trouble lies. Fierce competition for broadband customers has resulted in very low prices for essentially unlimited services. Having shied away from usage-based billing in the past, some providers are now starting to re-explore this area to find a sustainable model.

In January it was revealed that Time Warner Cable (TWC) in the USA was running a regional trial to see if its market would now accept usage-based billing models. The results of this pilot are not yet known, but the company has come under criticism amongst analysts for potentially alienating their customers and as a result losing out to competitors who stick with the “all-you-can-eat” model.

There are of course other tools and methods available to control the use of bandwidth-intensive services. So called “throttling” of heavy users (not the people themselves, but the speed of their broadband connection!), or placing upper limits on the “free” service, above which usage-based tariffs apply.

Unprofitable customers

In London there used to be a nightclub that offered free drinks all night for a fixed price as part of the entry. A classic all-you-can-eat, or perhaps that should read all-you-can-drink scheme. The trick here was of course to set the entry price at a point where you knew that the majority of customers will not consume as much alcohol as the entry was worth. Sure, there would be a few people who would drink more than their fair share, but it should still be a profitable business.

The problem of course comes when the average customer is affected by the behaviour of the minority who consume more than their money’s worth – to the detriment of the majority. The result is that the profitable customers drift away, only to be replaced by the less desirable customers who over-consume and are not profitable. Does this sound familiar? Broadband providers take note.

Transparency

As the credit crunch continues to impact all areas of business, operators will have to do more than just offer all-you-can-eat bundles, for fear of only attracting the sort of customers that will not be profitable. Usage and event-based pricing will need to be deployed intelligently and take advantage of the real-time interaction with the customer to provide a high quality customer experience.

Transparent pricing where the customer knows what the service will cost before it is used, or what it is costing as the service is consumed, will be a critical factor in building customer confidence in the services they are using, and with this comes a loyal and profitable customer base.

In the future, flat-rate services will have their place, but with increasing investment required in the network access and transport layers, operators may need to find other ways to make a flat-rate only business model pay.

Dominic Smith
Dominic.Smith@cerillion.com

BTC Bahamas to implement Cerillion convergent solution for NGN services

London, 23rd May 2008 – Cerillion Technologies today announced a multi-million dollar contract with The Bahamas Telecommunications Company Limited (BTC) to implement a fully convergent CRM and billing solution in the Bahamas. The new solution will replace two separate legacy systems and be used to consolidate all fixed and mobile services onto a single platform, including support for convergent prepaid and postpaid rating. It is also a key component in BTC’s wider business strategy, preparing for deregulation and helping to secure revenues from the new Next Generation Network (NGN) currently under deployment.

Following a thorough competitive tender process, BTC has chosen Cerillion’s pre-integrated CRM and billing solution, incorporating its CRM Plus, Web Self-Care, Revenue Manager, Output Streamer and Information Manager products. The Cerillion system will help BTC to launch new services quickly and provide innovative product bundles to their customers. Pre-integration of CRM processes and back-office billing functions will enable the highest levels of revenue assurance, whilst delivering a first-class customer experience.

“Cerillion’s unique bundled component product suite provides us with all the key functional components we require to support the business processes of a next generation telecoms operator, already pre-integrated from a single vendor.” commented Nickola Dawkins, CIO, BTC. “This represents not only gains in terms of operational efficiency, but also a faster time to implement helping us to achieve a more rapid return on investment.”

“Cerillion has an excellent track record of delivering convergent billing solutions and supporting the very latest in service technology and we are confident that they will help us to achieve our strategic goals” added I. Kirk Griffin, Executive Vice President, BTC.

Louis Hall, Cerillion’s chief executive, says, “Over the past 5 years we have committed to developing business across the CALA region through active participation in key industry bodies such as the Caribbean Association of National Telecommunication Organizations (CANTO). We are now delighted to be working with BTC on this exciting new project and look forward to a long and successful business relationship.”

New Cerillion Express CRM and Billing Solution Lowers Entry Barrier for Operators

London, 25th June 2008 – Convergent billing specialist, Cerillion Technologies, has announced the launch of Cerillion Express, a pre-integrated and pre-configured CRM and billing solution for telecoms operators. Offering rapid implementation and a very low total cost of ownership, Cerillion Express provides all the elements required to support a communications provider’s business in one off-the-shelf package.

The first edition of the new solution, Cerillion Express for Mobile, is targeted at mobile service providers who require a proven business support system to support their mobile operations. Utilising core components of Cerillion’s bundled component product suite, the solution covers the entire customer lifecycle from initial sales and order handling, to billing and collections, and includes the integration of prepaid and postpaid services. Other flavours of Cerillion Express will soon be available, tailored to other sectors of the telecoms market.

“With Cerillion Express we are able to dramatically lower the entry barrier for operators who want a complete solution to support their end-to-end customer management and billing processes,” says Guy O’Connor, business development director, Cerillion Technologies. “Based on best practice configuration and process support, Cerillion Express also delivers optimal system performance and can be run with a very small operations team or operated on a wholly managed service basis.”

“Cerillion Express is able to grow easily in breadth and sophistication, enabling operators to add extra functionality as and when required,” he adds. “We have drawn on more than ten years’ experience and expertise of CRM and billing projects to build the solution, so that our customers benefit by being able to focus on critical 'go to market' decisions without the distraction of system constraints or integration issues.”

The turnkey solution incorporates a full suite of professional services, including implementation in ten weeks; complete product and operations training; and a support and maintenance service, based on defined service level agreements. In addition to the full managed service option, the solution can be provided under a build-operate-transfer model, which offers a managed service for the first year of system operation.

Spotlight: Cerillion Express for Mobile

Cerillion Express for Mobile is a pre-configured and pre-integrated CRM & Billing solution which provides all the elements required to support a mobile operator’s business in one off-the-shelf package.

In many cases new and recently started business ventures, in both emerging and mature markets, require a complete solution to support their end-to-end customer management and billing processes. Such a solution must enable the mobile operator or service provider to bring their concept to market quickly and cost-effectively without prejudice to delivering it with the highest level of customer service. At the same time, the solution they put in place must be capable of adapting and growing as the business takes off, supporting any changes in direction and fine tuning that are required “on the fly” without constraining the operator’s flexibility or slowing its progress.

Cerillion Express for Mobile (Cerillion Express) is Cerillion’s solution to these challenges, built on more than 10 years experience delivering pre-integrated CRM & Billing solutions to mobile operators worldwide. Utilising core components of Cerillion’s bundled component product suite, Cerillion Express has been pre-integrated and pre-configured to meet the CRM & Billing needs of a mobile operator’s business straight out of the box. Packaged with a complete set of implementation services, Cerillion Express can be put into service in 10 weeks from project kick-off.

Low Total Cost of Ownership

As a pre-integrated business support system, Cerillion Express provides a functionally rich, end-to-end CRM & Billing solution with a very low and effective total cost of ownership. Pre-configuration means that the solution is set up to support the core processes of a mobile communications provider straight out of the box, with options to grow and expand the solution as business priorities change.

Rapid Implementation

Cerillion Express can be implemented in just 10 weeks from project kick-off to go-live, ensuring the fastest possible Time to Revenue and the best Return on Investment (ROI) of any billing system on the market.

High Operational Efficiency

Cerillion Express is built upon an Integrated Workflow Architecture (IWA) to ensure that business rules and processes can be mapped and automated across the whole end-to-end CRM & Billing solution. Combined with the pre-configuration of system parameters for optimised system performance, Cerillion Express achieves the highest levels of price / performance and can be run and maintained by a very small team of operations staff.

Inbuilt Revenue Assurance

Pre-integration around a common database makes Cerillion Express a revenue-assured solution, removing the risk of poor systems integration and avoiding unnecessary data replication and synchronization issues that may exist with best-of-breed deployments. Embedded workflow and order management ensures that front-end orders are successfully transitioned to the back-office, making sure all possible services can be billed for and eliminating revenue leakage at source.

For more information about Cerillion Express, please contact info@cerillion.com.