Smart BSS: The Revenue Management Fix for Mobile ‘Bill Shock’

By Dr. Alastair Hanlon, Convergys

When the U.S. Federal Communications Commission voted on Oct. 14 to consider rules on preventing mobile customer “bill shock," headlines blared the news as though the wireless sector faced an instant mandate to perform billing and revenue management system cartwheels.

Let’s all take a deep breath. In regulatory parlance, the FCC issued a “Notice of Proposed Rulemaking" initiating a 30-day comment period, to be followed by another month of counter-comments by all parties. The final vote on bill shock rules may not come until late in 2010, or even early 2011. In a word, though the pace of events now set in motion may seem rapid to many, what’s happened as of now is not quite the “all hands on deck" fire drill some make it out to be.

There is time – not abundant but sufficient – for thoughtful deliberation by industry leaders on the best course of action, beginning with recognition that bill shock can indeed be a serious problem that undermines carriers’ best efforts at customer care management and negatively impacts customer satisfaction, loyalty, and ultimately, service provider revenue.

To understand just how serious the problem is for customers, consider highlights from the FCC survey that propelled U.S. government interest in bill shock regulations in the first place:

• 30 million Americans – one in six mobile users – have experienced bill shock.
• More than half of these consumers saw an increase of $50 or more, and many were not alerted in advance by their service providers.
• The tools in place to eliminate bill shock vary widely between service providers and type of service, and can be difficult to find.
• Most of the alerts that are offered do not cover all services or are not sent before the overage charges are incurred.

The pity is that all of these problems are readily avoidable. Elsewhere in the world, where strict laws already require mobile operators to provide customer alerts on usage thresholds, the industry is seeing highly successful results through the deployment of advanced BSS solutions that head off bill shock altogether. The lessons learned may well apply here in the States.

As one example, Orange Austria, the third largest mobile network provider in Austria with 2.2 million subscribers, recently went live with Convergys’ Smart BSS Solutions to meet the European Union’s mandated timeline for implementing “bill shock avoidance" measures. Today, the Convergys Real-Time Convergent Charging Solution lets Orange Austria calculate the data usage of each of its subscribers so they can monitor their data-roaming charges and monthly usage in real time. The Convergys solution also works alongside telecommunications providers’ existing billing systems to monitor usage and provide real time alerts to customers.

While halting bill shock, service providers soon discover other advantages of these sophisticated BSS solutions, for example, the ability to differentiate themselves, and thus attract and retain customers, based on the quality and transparency of billing information provided. The systems also unleash new power to monitor usage patterns and detect fraud – and even to boost sales via targeted, personalized service offers. As Peter Filka, Orange Head of IT puts it, “Orange Austria can now offer new services through trial offers, cross-service promotions, and service bundling."

Given the financial benefit, on top of the increased customer satisfaction that results from stopping bill shock in its tracks, why wait for federal rules that address just one aspect of what Smart BSS can do? At its core, bill shock is a revenue management issue best addressed by Smart BSS solutions. As policymakers contemplate rules to prevent bill shock, the smart money is on industry leaders who take the potential for federal intervention as a real time alert in its own right, and move proactively.

Dr. Alastair Hanlon is global director of telecommunications at Convergys, where he is responsible for smart revenue solutions for telecommunications service providers.