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December 1999

rich.gif (5262 bytes) Paper, Paper Everywhere...
Just E-Mail The Bill!


Go To Sidebars: [One Vendor’s Approach]   [More Points To Ponder]

One of my favorite oxymorons is the computerized, paperless office. A brief glance at my desk on a daily basis confirms how ridiculous this prediction turned out to be. Being in the publishing industry, of course means that aside from the paper we create internally, we also receive a slew of press kits from the companies that you read about in these pages. Press kits come in a variety of forms, the most common being very heavy, glossy, and taking up mountains of space.

So whenever possible, I ask that information be sent to me through e-mail. At least I can always search e-mail by keywords when needed, making it easy to find what I am looking for. I store so much paper at work that when I get home, the last thing I want to be confronted with is even more paper. As my travel schedule is quite hectic, it can take me many weeks to get to my mail and as such, I have to scramble to get my bills paid before I get charged late fees. In fact, a future goal is to replace my monthly paper bills with electronic versions, perhaps e-mailed to me. But I am still living in the present and as such have to deal with my dreaded monthly bills, 12 times a year.

For those of you who read my “One Less Wire” column online at TMCnet.com, you know that I subscribed to a cable modem service about four months ago, which is supplied by my cable company, Cablevision, who resells service from @home. Recently one weekend, I was in a rush to pay my bills and to my surprise Cablevision had sent me two bills with the same billing period. I called Cablevision and asked why I was faced with two bills instead of one. They told me that one bill was for my cable modem and the other was for my usual service. Being the hater of extraneous paper that I am, I asked if I could have my bills combined into a single one, to which they replied, “No.” I then asked if I could pay for both invoices with a single check. Again, the response was an unequivocal, “No.” I was pretty horrified to find out that the same company couldn’t bill me for my various services with a single bill. Who needs more paper in their life? I then asked if I was the only person that had this concern. You guessed it! Once again, the reply was “Negative.”

Needless to say, this was not a strong relationship building experience between Cablevision and myself. If all service providers, especially the new breed of Integrated Communications Provider (ICP) run their businesses like this, customers are going to be pretty annoyed. ICPs should have the flexibility to allow their billing system to be tailored to meet the needs of their customers. Some customers (such as myself) want one bill, and yet others might want multiple bills, perhaps so they could submit one to their place of work. As competition heats up, service providers need to make sure their billing systems are sophisticated enough to handle the needs of a variety of customers.

Billing has become so crucial in the Internet telephony market that a wealth of vendors are emerging ready to help service providers deal with the specific demands that this burgeoning industry places on the provider. I present below a brief Q&A with some of the leading billing providers in the industry. I’d like to thank Gal Miara of Mind CTI and Mike Couture of Solect Technology as well as Laura Jordan of Portal Software and Dina Frale of APEX Voice Communications  for taking the time to speak with me.

RT: What does it take for a service provider supplying new services to bundle them on one bill?

Billing software with the following capabilities:

  • The ability to define the service and its tariff.
  • The ability to distinguish the services and rate them separately, either in real-time or in a post-paid manner (based on the hardware’s capability to do the same).
  • The ability to store the rated CDRs (call detail records) while retaining the information for the billing phase.
  • The ability to sort and sum the CDRs of each service and present each service as a subtotal in the invoice.

– Gal Miara, Mind CTI

The actual process of bundling new services onto one invoice or statement is really only the tip of the iceberg in terms of the challenges of offering multiple bundled services. If you look at what is behind the invoice in the operational support system (OSS) including order entry/customer acquisition, provisioning and activation of services, collection and mediation of usage records, rating, discounting, and billing/aggregation, all have to occur before a charge can appear on an invoice. Historically, every new service has given rise to a new solution, leading to stovepipe implementations. Most of the work for one service was not repeatable for a new service. Even something as simple as changing the pricing plan could take months and millions of dollars. Couple this legacy with the slow evolution of traditional circuit-switched or broadcast services and innovation really drags.

The rapidly emerging new public network addresses this on the network side. By decoupling new applications from the underlying network, IP fosters service innovation. However, all of these OSS challenges remain the same, and in some cases, intensify significantly.

– Mike Couture, Solect

RT: Are there problems that must be overcome to achieve a livable billing solution?

When integrating communication systems with billing software, numerous problems in many areas must be overcome. The needs of the consumers, the needs of the provider, the systems involved (hardware and software), the environment (regulations, standards, language, partnerships, etc.), future plans, not to mention a solid business entity (the billing company) that can provide the livable/reliable software solution and prolonged maintenance and support.

Gal Miara, Mind CTI

Absolutely, especially in the IP space. Along with the explosion of new opportunities through new applications like unified messaging, voice over IP, streaming video, and broadband wireless IP, comes a multiple effect in the challenges historically faced in the circuit-switched world. Now, service providers have to be able to integrate and launch new services, pricing plans, and bundles in days or weeks! Even a couple of months can mean life or death for an IP provider, where competition is fierce and the market incredibly dynamic.

Mike Couture, Solect

RT: How flexible do billing systems need to be to accommodate the needs of their customers?

Incredibly flexible. The abundance of vendors, the lack of well accepted and common billing standards, as well as the differences between different countries’ communication environments (regulations, currency, taxes, accounting, etc.) require the billing vendor to accommodate for a wealth of possibilities and features in a highly flexible manner.

– Gal Miara, Mind CTI

Infinitely flexible is still not flexible enough. The billing system, from provisioning and collection right through to presentment of an invoice, must be able to deal with the unknown service or XoIP. As a service provider, you don’t know today what ‘killer app’ will come along tomorrow. You don’t know how you will bill for it (flat rate, MB, hits, duration of use, geographic, micro-events, sponsored, etc.). What you do know is that you’ll need it fast. Your billing system must be able to provision, collect, and rate anything. Also, if the service provider decides to enter a new market segment, for example move from consumer to business, they will want to collect very different customer information than when they were just dealing with retail customers. This calls for new fields in the CSR interface as well as the database. Service providers should be able to extend their billing system dynamically, without bringing the system down or incurring costly coding delays. An HTML interface and the ability to add extended attributes to the database is key.

– Mike Couture, Solect

RT: What is the biggest challenge a provider faces when implementing a new or enhanced billing system?

Actually 2 challenges:

  • Making sure the new/enhanced system not only meets all the provider’s current requirements but also includes enough flexibility and scalability in order to support new features and requirements in the foreseeable future.
  • Integrating the new/enhanced system with a previous billing system and current relevant information systems (customer database, accounting system, etc.).

– Gal Miara, Mind CTI

The biggest challenge is in prioritizing their requirements. No billing system does everything you want, the way you want, right out of the box. If a service provider waits to start generating value from an investment in billing until it is “ideal,” they may be delaying a return on investment unnecessarily. The best way to approach it is to phase in requirements, with much of the latter phase work done in parallel, and get early wins to build on.

– Mike Couture, Solect

RT: Please address the issues of tiered billing (gold, silver, bronze) as well as usage-based billing.

The telecommunications market is constantly evolving and changing, from both the technology and business aspects, and the variability is just too large (standards, services, hardware, software). Many small, first-time carriers/telcos/ITSPs are emerging and many mergers and acquisitions are occurring.

ISPs are moving into telephony, traditional carriers are moving into VoIP, cable companies want to supply everything, and so on. The current buzzwords are convergent billing or unified messaging (data, video, voice, text on the same media and in a single invoice). The only tiering which makes sense is based on the overall system capacity in terms of services, data/calls volume, and number of customers.

Gal Miara, Mind CTI

A key aspect to flexibility revolves around the kind of pricing plans that can be created. This is of particular interest to a service provider’s marketing or product management staff, who may not always get a large say in the selection of a billing system. These marketing people must have the capability to rapidly create multiple pricing plans based on the same underlying service. This can’t be hard coded. For example, you must be able to have a $9.95 subscription with 100 minutes of domestic calling, as well as a $19.95 package with 400 minutes of calling. This implies two pricing plans based on the same VoIP service. It also calls for usage-based billing. After 100 or 400 minutes respectively, a charge of $0.09/minute might apply. Without usage-based billing, a service provider loses their ability to influence consumer behavior, and loses a very powerful differentiation tool. Both of these plans look “flat rate,” but they require usage-based billing.

– Mike Couture, Solect

Service providers of the world, please start thinking about your billing systems as an integral part of the new services you offer. As customers such as myself strive for the paperless office and paperless home, we will look to you to provide us with the flexibility in billing that we require. Although the market may seem ripe for the taking today, once you tarnish your image with antiquated billing systems or inadequate service, you will lose many customers forever. Only by anticipating your customers’ needs ahead of time and acting accordingly can you make sure to keep your customers loyal.

One Vendor’s Approach


In an industry that is never static, the most important feature of a billing system is flexibility. Without the capability to incorporate new services and modules, a billing system can quickly become outdated.

The APEX Billing System has a transaction-based rating engine, which means that it can bill for almost any type of service as long as a call has linked to it:

  1. Date and time stamps;
  2. Some type of billing unit — minutes, number of occurrences, etc.;
  3. A location it is to be billed from or to; and
  4. Where it came from — a specific switch or some other device ICP, ISP, etc.

Each available service has its own screen where information relevant to that particular service is entered. Customer details are entered on separate administrative screens. When a screen is added for a new service, a rating scheme must then be established to determine how the service will be billed (per transaction, per month recurring fees, tiered billing etc.) and listed. The fact that each service stands alone means any number of new services can be easily incorporated into the system. The separate administrative screens avoid duplication of information, thereby providing better efficiency. We have many predefined services, such as long-distance or travel card, but can easily build custom services when required.

One of the biggest challenges now facing manufacturers of TDM-based billing platforms is finding a way of moving into the next-generation network. This move was relatively seamless for the APEX Billing System because of its transaction-based rating. Software now exists to collect and code packet information into CDR. This then provides the necessary units for which we can bill.

More Points To Ponder


New services over cable are being rolled out on a monthly basis. Service providers need the ability to combine, in one concise package, the charges for cable modem service, VPN, online purchases, phone line and usage for VoIP, the rental of educational software by kids on per-use basis, and the latest video release purchased through cable modem. This requires a customer management and billing system that can bill for online transactions as well as basic access services.

Legacy billing systems are batch-oriented and built on inflexible architectures with closed interfaces. Traditional cable, telephone, and wireless billing systems, each fundamentally designed for its specific service, are unable to support the emerging classes of data services.

The billing requirements for traditional networks are drastically different than those for next-generation networks and services. Traditional network billing systems were custom designed, application-specific, batch-oriented, and not built to accommodate rapid innovation. Next-generation networks are multifunctional, can support many services, and require instantaneous response times.

To facilitate entry into new markets, service providers are increasingly using a best-of-breed approach. They continue to use the legacy billing system for current services but integrate it with a new IP billing system to support new data services and present the customer with one bill.

Advantages of this approach include: Minimal impact to existing services, freedom to evaluate real-time technology for future services, support for a convergent bill (i.e., consolidated bill presentment, cross-service bundling for promotions, integrated accounts payable, etc.), and phased implementation for rapid market entry.

The four biggest challenges providers face when implementing a new service are sunk costs, seamless integration with the existing system, rapid deployment of the new system, and supporting the need for comprehensive real-time authentication and authorization, service provisioning, usage tracking, and rating.

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