Billing as Anticipation

Billing is an important component of OSS/BSS (Operations Support Systems/Business Support Systems), which play a critical role in the modern telecommunications business. Several years ago more than a half of operators, especially start-ups, were using in-house billing systems. Today, the focus gradually shifts to industrial solutions. However, at the same time a clear-cut market segment is emerging. These are mostly medium ISP (Internet Service Provider) businesses, which exclusively develop their own billing systems in house. They substantiate such decisions by maximum adaptation of their solutions to the company’s requirements, without the need to customize expensive industrial billing systems. Opponents of hand-made solutions appeal in this case to their colleagues that, in the long run, such programs require employing a team of in-house developers. Even if it is only one employee, his/her dismissal may jeopardize the whole business.

www.ip-news.ru, June 2009

Who is who

Billing solutions are designed to automatically account usage of telecommunications and other related services provided. Such solutions truly lie in the core of each telecom company’s business. Today, various billing products are widely used by telecommunications companies, including ISPs.

“Most often, billing systems are complex software products, enabling operators to manage their tariffs, collect statistics, control access to resources, and more,” says Yuri Epishev, Head of Telecommunications System Integration at Reksoft.

“The billing system should fully support prepaid, postpaid and hybrid payment methods, enable fast time-to-market for new service offerings, support interconnection partners and content providers, and feature extensive fraud prevention tools,” says Sergey Nikolishin, Head of Rating Systems Development at СBOSS. “Also, billing systems should seamlessly integrate with any hardware platforms, communications and other applications. The characteristics and quality of the billing system used show the operator’s maturity, its current opportunities and ambitions.”

“Billing systems are required to provide commercial services to end users,” says Sergey Polyanin, Head of Software Development at CTI. “Today, increasing attention is turning to convergence – capability of a single billing solution to bill all services, both offline and in real-time.”

Do we really need them?

The answer to the question of how demanded billing systems are in today’s telecommunications business is unequivocal.

“The demand is determined by today’s reality: smaller budgets mean less projects to invest in,” Vladislav Pinzhenin, General Director of Network Solutions (LANBilling product) derives a simple formula.

“Generally, it is more correct to speak not about demand on a billing solution as a separate system, but rather about it being in demand within comprehensive integrated solutions,” states Sergey Nikolishin. “The necessity to use a mosaic solution becomes a thing of the past: billing from one vendor, messaging from another, VAS products from the third one, business intelligence from the twenty fifth vendor, with all of them based on different hardware platforms. Such patchwork solutions were a real headache for the operator, as all components had to be integrated requiring additional costs, were very difficult to support and operating unstably anyway.”

Don’t want to, but I should. Even if expensive

Recognizing the need to systematize their business processes, telecom operators are not eager to continuously upgrade their billing systems. “As experienced IT directors say, “If it’s working ok – don’t you touch it”. Any error or fault in the billing system immediately affects end users and, consequently, may result in the operator losing its customers,” says Yuri Epishev.

Nevertheless, “any billing system in any country dies if it does not develop at least for half a year,” Vladislav Pinzhenin is sure. “It dies because it does not satisfy market requirements. As a result, developers are forced to continuously improve their systems, and, consequently, infuse cutting-edge technologies into their products. As for the global experience, we traditionally follow in its steps. Moreover, most domestic operators use foreign billing platforms, and, consequently, these operators use similar billing procedures as their foreign counterparts.”

Only major market players can currently afford to fully automate their billing processes, as such systems are very expensive to buy and implement. “Smaller operators choose to install several small systems and integrate them, as this accelerates time-to-deploy and reduces total cost of ownership,” says Sergey Polyanin. “The lack of pre-integration of these systems is compensated for by easier business processes.”

“The cost of billing system development may vary from tens of thousands of US dollars for medium-sized carriers to tens of millions of US dollars for major players,” says Mikhail Savitsky, Head of BSS and CRM Systems at Microtest.

For example, several years ago Svyazinvest holding had to pay almost $500 million for the new billing system from Amdocs.

“It is assumed that, on the average, telecoms companies spend their expected monthly profit to build a billing system,” adds Savitsky. “Annual support expenses total about 15-25% of the implementation cost.”

“We usually calculate the unit cost per subscriber, irrespective of the usage profile,” says Vladislav Pinzhenin. “For example, in our case it may vary from 7 rubles per subscriber to $5, depending on the project complexity.”

Mobility ahead

The most advanced billing systems are traditionally used by mobile operators.

“Today, Russian mobile operators do not yield an inch to their foreign rivals, and their software adheres to the highest standards,” says Yuri Epishev. “Operators with smaller subscriber bases or those less dedicated to rapid user data and tariff management (for instance, incumbents) settle for less powerful systems. However, in the face of growing competition, more and more companies opt for hi-end billing systems.”

“If by billing platforms we mean Billing & Customer care systems, i.e. not only a rating engine, but rather a customer care system, than we have only one solution, from Amdocs (Israel),” Mariya Balutina, PR manager at Vimpelcom makes an example. “For postpaid customers - Ensemble, for prepaid ones - Comverse, plus some of the billing is performed by ITPSS. We were able to do without a systems integrator when we installed these systems back in 2002. The project was performed by a large joint team of AMDOCS and Vimpelcom. Before that Vimpelcom was using an eponymous billing system from the Russia’s Atlant. Atlant was created based on the outdated technology platform and could not be scaled, i.e. we reached the maximum allowed number of customers served,” Mariya Balutina explains the reason for migration. “Ensemble was tailored to Vimpelcom’s business requirements and fully supports our custom processes.”

Nevertheless, according to Valery Streltsov, General Director of TiERA, mobile operators have the heaviest and clumsiest billing systems, as “managers and even technical staff are sometimes completely clueless about simple routine operations.”

Wires and cables catch up

“PSTN carriers pay much less attention to billing, than mobile companies, although this situation is slowly changing,” says Sergey Nikolishin. “This may be due to, for instance, expanding fixed-line service offerings (an example – convergent services, telephony plus Internet access packages), as well as to growing competition between fixed-line and mobile operators.”

“Until recently, regional cable TV operators were not giving billing systems enough credit,” says Vladislav Pinzhenin. “An Excel table performed all billing operations for them, and the service was disconnected by cutting the wire.” However, the situation here has also changed – most cable operators are striving to consolidate their billing operations.

Industrial preferences

“All major telecommunications companies, such as the ‘big three’ Russian mobile operators, Svyazinvest, Rostelecom and others already use industrial billing systems and that is why they hardly need new developments,” says Mikhail Savitsky.

According to Savitsky, billing system replacement is most demanded by telcos expanding into new telecommunications markets.

This was the case with TransTeleKom. Today, the operator is using Oracle CBRM (Communications Billing and Revenue Management) supporting long-distance and international communications. “The solution was developed by Portal Software (USA). In 2006 Oracle bought Portal Software and has continued to develop the product since then,” said Leonid Ivanov, Head of IT Division at TTK. Microtest completed systems integration. Implementation was started in late 2006, the solution was launched in 1Q08. Before that, TTK used an earlier version of the same system. “We used the previous version to provide services to operators and corporate customers,” explained Leonid Ivanov. “To deliver long-distance services to individual customers, we had to upgrade our billing system and migrate to a more powerful server platform.” According to Leonid Ivanov, the new system features a more advanced architecture enabling to solve more complex tasks without rebuilding the system core.

North-West Telecom has been using a billing system from Peter-Service to deliver services to businesses and individual customers since 2004. “Interconnect billing is performed by a solution from the same vendor,” added Andrey Yakovkin, IT Director at NWT. The billing system from Peter-Service has replaced multiple billing systems from different vendors (START, М2000, Integral, etc), NWT had been using. All migration was completed by NWT’s IT team, with no assistance from systems integrators. “We bought hardware from various suppliers, most of it coming from HP,” said Andrey Yakovkin.

To bill its services for subscribers and interconnect partners, Arctel is using a comprehensive solution from CBOSS. CBOSSbcc supports billing of intelligent telecom services, local, long-distance and international communications, Internet access and data. “CBOSSinterconnect is used for settlements with interconnect partners,” explained Arctel’s spokesman. “It bills local, regional, long-distance, and international call origination and termination services, and verifies bills coming from interconnect partners.”

According to the systems integrator, Stream-TV and Sinterra are using LANBilling.

Fans of in-house systems

Telcos opting for in-house billing systems argue that such systems are very easy to use.

For example, Eltel started to develop its own billing system Billingate and later created a separate company for this purpose – SАF-14. “This product is flexible, easily scalable and tailored to Eltel’s business processes,” says Konstantin Kiselyov, marketing manager. “Billingate bills all telecommunications services provided by Eltel. While modern billing systems usually include CRM and other additional modules for business process automation, the billing system should support all specifics of b2b and b2c markets from the technical, business intelligence and financial perspectives.”

WestCall is also using the in-house solution, the company says. “The solution is continuously improved to meet the ever growing business requirements. Each new version is appropriately certified,” says Alexander Emelyanov, Head of Information Systems at St. Petersburg WestCall branch. “When starting the ‘Home networks’ project in 2006 and IPTV in 2008, we enhanced the existing billing system.”

According to Alexander Freydkin, CTO at WestCall (St. Petersburg), billing systems of residential broadband (RBB) providers support a narrow billing segment, particularly, broadband access for individual users. These programs may sometimes feature various gimmicks, attractive to end users, for example, SMS alerts. “However, billing systems of a major telecom carrier support the full service range. In case of WestCall, these include telephony (and an agency scheme), Internet access, calling cards, intelligent communications services, IPTV, and more. For companies like ours billing platform is another tool enabling our customer-oriented approach: here each service has flexible access to the billing data, multiple payments methods are supported (credit, prepayment) and much more,” comments Freydkin.

“The system supporting interconnect billing is very different from customer billing (both corporate and individual),” says Evgeny Gurevich, Head of Interconnect Division at the St. Petersburg WestCall branch. “After the new interconnect regulations were introduced in 2006, such notions as local and regional call initiation and termination, as well as interconnect service classification depending on the number of transit network nodes emerged. This required significant revisions to the billing system.”

Before merging with WestCall, WinLink used Cadence, the billing system developed in-house by Ronald McCone. “According to some, Cadence is still used by several small RBB providers,” says Shvedov. “The system developed along with the company, with new feature sets added over the time. During the initial development stage we had no ready product to be used as example, so we had to create everything from scratch. Many networks, exactly like WinLink were using WinRoute and similar proxy servers back in 2002-2003. While Windows-based server applications were notorious, immediately after the company recruited a highly qualified Linux expert, development of the in-house billing solution was launched.”

Moreover, according to Sergey Shvedov, billing solutions from TiERA and SkyNet (NetExpert) deserve mentioning. “Both products were developed in-house by telecom operators, which, I think, is the most important, as developers concentrate on truly important functionality,” says Shvedov.

“From the very beginning we have been using our in-house billing system,” said TiERA’s spokesman. “Currently, we use version 7, and the technical specification is being prepared for version 8. Our billing system is designed for both subscriber account management and network monitoring. We use the same system to provide services to corporate and individual users. For the former, there is additional integration with the 1C accounting system.

TKT developed its own billing system back in 2001.

However, systems integrators have reason to consider in-house billing systems out-of-date.

“Until recently, in-house software was popular among small and mid-size telcos,” says Mikhail Savitsky. “But this practice is passing for many reasons. Firstly, the number of small players on the market has reduced, with a few large telcos dominating. Secondly, in-house software needs to be developed and supported, requiring significant additional effort.”

“Indeed, there are cases of telcos using in-house software, often with rather primitive functionality,” says Sergey Nikolishin. “This is inadmissible today. Undoubtedly, Russia is slightly behind in the telecommunications sphere from, for example, Japan, but we also effectively develop cutting-edge 3G and 4G services (e.g. mobile WiMax). These services feature complex business logic that cannot be supported by in-house applications. Besides, telcos that use such programs are subjected to considerable risk, as they depend on their developers and more often on the key developer whose dismissal may jeopardize the whole business.”

“The time of in-house billing systems has passed,” agrees Sergey Polyanin. “Today, even start-up companies use liteware billing solutions. As soon as the business starts showing stable growth, the company immediately considers purchasing a billing system meeting all modern requirements to functionality, convergence, and performance. Besides that, a key issue here is if the billing system has been certified. Neither in-house, nor shareware billing systems have conformity certificates and thus they cannot be used commercially.”

However, according to Vladislav Pinzhenin, not all in-house systems can be characterized as ‘retro’. “I would distinguish two types of telcos that use such solutions. Firstly, these are companies short of resources and in desperate need to save. They believe that having one or two in-house developers will suffice. The second ones are worth of respect, as they considered a lot of solutions and found that none of them meet their requirements by some reasons, mainly because of technology, or they have found a perfect solution which is, however, extremely expensive. In this case, an in-house solution is a reasonable compromise and the telco allocates the same amount of resources for it as a specialized solution vendor.”

However, all of these programs share the same flaw – they are tailored for specific business. “If you slightly modify the business for which they are made, you will need to change half of the program for it to adjust to new business requirements,” explains Pinzhenin. “Most of such programs are very narrowly targeted and are hard to deploy for a different business.”

It is remarkable that most of small RBB providers failed to reply to IP-News questions concerning the billing systems they use. “This issue is quite intimate for RBB providers,” comments Anton Shugay, General Director at Severen-Home.

Nevertheless, the telecommunications market keeps growing every year. This makes billing systems gain ever higher priority in operators’ business plans, thus generating new revenue streams, for example, for consulting companies and systems integrators.