BSS (inc. billing, revenue assurance)

Billing Loses Its 'Boring' Tag

Try this simple word association game: Ask someone in the telecom sector to shout the first word that comes to mind when you say "billing," and I bet they say "boring."

That'd be fair enough. For a long time the billing world has deserved its "dull but worthy" tag – anyone who has stumbled into a telecom billing systems event or conference session will likely recall how they quickly became interested in carpet patterns, lighting arrangements, or the back of a sleeping executive's head.

But times have changed. Large companies have started to acquire billing specialists, while niche billing sector players talk as much (if not more) about their packet inspection, policy management, and service delivery capabilities than their list of billing functions.

Buying into billing
Slowly but surely, the telecom billing landscape has been changing. A few years ago the main names that sprang to mind were Amdocs Ltd. (NYSE: DOX), Convergys Corp. (NYSE: CVG), and CSG Systems International Inc. (Nasdaq: CSGS). Now you need to add many of the telecom sector's major equipment vendors to that list, along with Comverse Inc. (Nasdaq: CNSI), Intec Telecom Systems plc (London: ITL), and Oracle Corp. (Nasdaq: ORCL), all of which have made billing acquisitions in the past few years. (See Oracle Acquires Portal, Convergence Drives Billing M&A, and Intec Buys ADC Billing Unit.)

Ericsson AB (Nasdaq: ERIC) is one of the industry's big hitters to have splashed some cash on some billing know-how. Sure, it's been in the billing market for years, courtesy of its IN (Intelligent Network)-based pre-paid billing platform that it has supplied to hundreds of mobile operators. But Ericsson is no longer just a mobile systems company – now, following an attention-grabbing shopping spree, it's a fully fledged developer and provider of optical, Ethernet, fixed broadband access, and video delivery systems.

But while the acquisition of Marconi, Redback Networks Inc. , Tandberg Television , and Entrisphere Inc. have dominated attention, Ericsson has made some other key acquisitions, too, in the software sector.

One of those was LHS Group , a specialist in post-paid billing systems. The catalyst for that €310 million ($488 million) purchase was Ericsson's need to have pre- and post-paid billing capabilities, so it could create a unified billing system – one that can do all sorts of billing for all sorts of services (voice, data, video, wireless, fixed line) using a single system. (See Ericsson Buys Billing Vendor LHS.)

That's something vendors have been talking about doing for years and something that carriers have been talking about wanting for just as long. Now, though, we're past the talking stage and into the specification, procurement, and deployment phase, because executing a unified billing strategy goes hand in hand with the IT transformation plans that major carriers are instigating as they migrate to their next generation networks. (See Telstra Outlines Massive OSS Project, Telstra CEO: Survival of the Bravest, and BT Awards Monster OSS Deal.)

The idea is simple, and well known: Operators don't want multiple networks and hundreds of software systems – they want one (ideally) network and a small number of back office systems that will make it easier to run their networks and create, deliver, and bill for new services.

And unified billing platforms suit the needs of emerging market mobile operators that often experience rapid initial growth with pre-paid services but later want to diversify with post-paid subscriptions, all without having to deploy new back office software. Many of the initial unified billing platform deployments have been in emerging markets.

Battle brewing
So now there's something of a battle brewing among the major vendors to have the best unified billing offering for carriers, because if they can get their foot in the door with that, then maybe a whole host of other business, especially integration and managed services work, as well as the supply of other (often third party) software systems, might follow.

Huawei Technologies Co. Ltd. , for example, has developed its own unified billing system and created a standalone business to chase after carrier software systems business. (See Huawei Goes Indie for OSS.)

And Nokia Networks , which created a dedicated software systems unit, Operations and Business Software (OBS), at its inception on April 1, 2007, and which places a great deal of importance on its OSS/BSS capabilities, plans to build a new unified billing system. (See Nokia Siemens Gets Ruthless on R&D Focus and Major Vendors Kiss OSS.)

At a recent meeting with Light Reading, Juhani Hintikka, the recently appointed head of OBS, said his team is "introducing post-paid capabilities to the existing pre-paid [system]... we can do it from one platform," all without the need to make an acquisition and integrate disparate systems. Hintikka said an announcement would be made "shortly" about the development.

And, of course, there's Alcatel-Lucent (NYSE: ALU). Its OSS/BSS strategy relies heavily on partners, and that's how it's approaching the unified billing space. Like other mobile infrastructure vendors, it already has a pre-paid billing platform. To offer a converged billing/CRM system it teamed up recently with Convergys. (See AlcaLu, Convergys Team Up.)

But it's not just the big guns that are into this space.

Billing with knobs on
Among the specialist vendors, simply offering a plain, vanilla billing system is becoming very passé. Now billing is just part of a specially developed, integrated platform that enables subscriber management, packet inspection, policy control, service bundling, real-time pricing control, location-based tariffing, and so on.

Two companies that offer such sophisticated functionality, and have customers using their products in live commercial networks, are Israeli outfit FTS (London: FTS) and Canadian firm Redknee Inc. (Toronto TSX: RKN).

You'd struggle to stick a boring label onto Redknee: This is a small company that's been to the business gym and stacked up on some strategy steroids. (See Redknee Preps Shopping Spree.)

FTS, meanwhile, has just launched the latest version of its integrated billing/CRM platform, forged some new partnerships with the likes of HP Inc. (NYSE: HPQ), Tech Mahindra Ltd. , and a few deep packet inspection specialists, undergone a corporate revamp, and built a $32 million a year business that's on course to grow. (See FTS Upgrades OSS, FTS Reports 2007, and FTS Serves Up a Policy Platform .

So if you try the word association game, and someone says "boring" when you say "billing," just carry on the game with a resounding "bullsh*t," because the billing brigade got itself some hot, and potentially profit-making, technology and business plan smarts.

— Ray Le Maistre, International News Editor, Light Reading

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