Shift to prepaid will need new back office systems
Over 70% of carriers pushing PAYG at high value services, but billing lags behind
Published: 12 January, 2011
The market for carrier back office (BSS/OSS) software has been under intense pressure in recent years, as the industry battles to bring fragmented and standalone systems into a coherent whole that can support new business models. In particular, carriers need to have a single view of the customer, across multiple services and networks, as part of family or fixed/mobile plans, and with combined prepaid and postpaid activities. This has been hugely difficult to achieve, with operators struggling to migrate systems that support prepaid and postpaid completely separately - let alone accommodating convergence, multiscreen or the emerging trend for multiple data devices to share one account or bucket of megabytes.
Some carriers have as many as 100 different software packages, with little integration or even a common portal-based overview. Postpaid billing and customer relationship management is usually carried out by a dedicated package from a specialist supplier like Amdocs, while prepaid has traditionally been tied into the network and provided by the infrastructure OEM. Now the issue is becoming more urgent as operators move to more flexible tariffs, and as the prepaid approach extends beyond low value voice customers. Now, many of the cellcos' most desired subscribers have prepaid for at least some of their needs - for family members, secondary mobile devices like dongles, or even for their main phone as contracts become more onerous.
According to a survey commissioned by Amdocs from research firm Ovum, prepaid charging is now a critical issue for carriers, rather than an afterthought. The report forecasts that prepaid connections will grow from 75% of the world total in 2010 to 77% in 2015, and it says 73% of service providers are planning to expand prepaid options into high end options that are traditionally preserved for contract users, while 63% are looking at converged billing. In developed markets, the shift to prepaid is more pronounced - in the US, it accounted for 20% of connections last year, but should be 25% by 2014.
The eventual aim is to treat postpaid and prepaid customers in the same way, and to have the flexibility to introduce new services and prepaid propositions more quickly to seize competitive advantage. This could help carriers slow down the spiralling price war that has been seen in key markets like the US and India, by adding extra value to prepaid deals.
Rafi Kretchmer, product marketing director for revenue management at Amdocs, told ConnectedPlanet that carriers "need a way to better define prepaid packages in a compelling manner without huge changes to core of charging systems".
He added: "The economic downturn in 2008 was a factor, but with mobile broadband and data services, it will trend up. Subscribers, whether pre- or postpaid, will move beyond traditional voice and text and experiment with mobile broadband with prepaid, where they feel they are more protected from surprises."
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