Telecommunications billing is a very simple concept with a somewhat complex level of application in real life. Part of the reason for this is the split in the industry between traditional, less flexible approaches and more modern integrated approaches. Here’s a simple overview of how things work:
The Traditional Model
The traditional model relies on three strands of work to deliver billing – operations, information, and financial data. In general it works on a per service model which treats each service provided as belonging to a unique customer – even if a customer has many services from the same provider.
The trouble with this approach is that it offers poor value to both the telecoms provider and to the clients. If each service is managed separately it means that it’s harder to spot instances of fraud or overuse. It’s also harder to provide tailored offerings that present better value to a customer who chooses to combine several services with that telco. Then there’s the administrative burden of creating a separate bill for each service and distributing them separately.
The Modern Approach – Convergent Billing
Convergent billing is simply the facility to bring together all the services provided by an operator into a single bill per customer. This is true no matter how many services they order. So a retail customer might have a land-line, a mobile, and their TV or a business customer might have a VPN, a managed network, many land-lines and mobiles and they would both receive a single bill.
This approach can also be applied to both post-paid and pre-paid services. That means in the case of pre-paid services that convergent billing provides a single payment wallet for all services. It should be easy to see how this reduces the risk of abuse because the telco only needs to monitor a single account to see how much a customer is spending and how much exposure they have. It’s also an advantage to the consumer because it means they don’t need to visit the bank several times a month to pay their bills or if they’re on pre-paid they only need to top up one account each time rather than manage several accounts.
In short, convergent billing reduces risk and reduces costs for the telco and that benefit can then be passed over in better value to the consumer. It’s a win-win situation.