Squashing the Dumb Pipe Theory with Billing

Billing, however, is a much broader solution than in the past. In fact, one-third of telecom billing systems purchased in 2007 produced no invoice. Billing consists of prepaid IN charging, real-time convergent charging, postpaid systems, unified systems, interconnect billing, partnership management and billing and mediation. The more advanced systems include the ability to do real-time advice-of-charge notification, a la carte orders for content services and customized marketing promotions.

Baker pointed to Comverse’s work as VimpleCom in Russia as an example of the power of merchandising. VimpleCom captured a major share of the Russian market in only a few years. He said Comverse is a leader showing the market the direction billing needs to go. On the unified billing front, Amdocs has delivered the first product catalog system for a large carrier and continues to lead that space, even though, Baker said, a company called Orga Systems has supplied the first truly unified billing system to Astelit in the Ukraine.

Despite the $1.6 billion in growth over the next four years, traditional billing companies must be on the lookout for the resurgence of the hardware provider as a competitor.

“People assume that convergent billing was abandoned by the switch providers, but with Ericsson buying LHS and Nokia Siemens Networks coming on strong, they haven’t given up on winning a piece of the billing business. The big wireless hardware companies are going to start competing in billing. They are surging back,” Baker said.

Much of the new business also may be further distributed to providers of credit systems and rating engines. But billing companies aren’t sitting still. Amdocs, for instance, announced in June a new technology called "Turbo Charging," developed for real-time, complex event processing and improved charging performance. And in the fourth quarter, Amdocs will announce the availability of Amdocs CES-Charging 7.5T — a new product for large-scale convergent charging operations, based on the Turbo Charging technology.

The bulk of the billing market (27.2 percent) will be from the mobile prepaid segment. Fixed network business billing commands 16.4 percent, while convergent charging has reached 8.8 percent. For now, unified billing accounts for only 0.4 percent of the market (see pie chart).

Although interconnect billing, of which Intec Telecom Systems has long been the leader, is currently only 4.6 percent of the billing market, Baker said its importance is growing as global expansion grows. He identified Telarix as another up and comer in the market due in large part to its end-to-end interconnect management system, which monitors contracts, tracks fast-moving prices and handles settlements. “They have it nailed down,” he said.

Although partnership management was not part of Baker’s report, he said partnership management also would be an important need for billing providers to fill. It was that line of thinking that led Convergys to acquire Intervoice this month even as it contemplates splitting its business units apart.

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