Complexity in Carrier Service Offerings to Boost Telecom Billing Outsourcing Market
September 06, 2006
By Patrick Barnard, Group Managing Editor, TMCnet
For decades, most of the major phone and cable companies have outsourced their billing operations to third party billing service bureaus such as Convergys (News - Alert), CSG Systems and Amdocs (News - Alert). But the recent wave of mergers and consolidations - coupled with the fact that many of these phone and cable companies have brought their billing operations in-house – has resulted in lost revenues for the billing outsourcing market.
A recent study by Dittberner Associates, however, shows that this trend is about to reverse itself. The study finds that as the phone and cable companies roll out new service offerings - such as triple and quadruple play packages and advanced features such as video-on-demand and mobile video - their billing operations are rapidly becoming more complex. As a result, operators are now finding that outsourcing their billing services is actually more efficient and cost effective than trying to handle them in-house.
As a result, the study predicts that the billing outsourcing market is rebounding and will grow at a forecasted 8.8 percent compound annual growth rate (CAGR), from $1.1 billion in 2005 to $1.6 billion in 2010.
“Up to now, telecoms have managed relatively simple fixed-rate and usage-sensitive billing plans,” a press release from Dittberner states. “However, the rise of 3G content services and m-commerce means that telecoms will need to bill for usage in real-time, conduct deep packet inspections, generate relevant cross-sell offers, and keep track of thousands of content services with variable prices. This added billing complexity will ‘raise the bar’ above the billing capabilities of most operators, making service bureau options increasingly attractive.”
The study finds that MVNOs, in particular, are increasingly favoring outsourced billing as they begin to roll out new service offerings. With carriers growing concerned that IMS and other next generation technologies will render their integrated billing platforms obsolete, they are increasingly turning to the billing service bureaus to handle the job for them. With billing solutions such as Telcordia’s Maestro, for example, network upgrades are part of the platform, thus relieving the operator of maintaining its own SS7, CAMEL, and SIP interfaces.
Although more than 90 percent the billing service bureau market is still in North America, the Dittberner study predicts that international operators will soon be catching on to the advantages provided by billing outsourcing.
The study, entitled “The Telecom Billing Market: Retail Billing, Interconnect Billing & Real-Time Charging Systems,” is available to subscribers of Dittberner’s OSS/BSS KnowledgeBase, a market research service designed to track the growing number of emerging OSS/BSS vendors and solutions.
For more information, visit www.dittberner.com.
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Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.