To the invited analysts and media people at the Amdocs InTouch Business Forum recently held in Singapore, Guy Hilton, the Product Marketing Manager for Revenue Management Products of Amdocs, became a familiar face. For, he had a steady stream of presentations to offer to us. One such was on pricing challenges before telcos.
“Having a real-time charging platform means that all subscribers, be they post-paid or prepaid, can now be addressed in real time,” says Hilton. This blurs the line between post-paid and prepaid but also enables the creation of the hybrid subscriber where the subscriber can use both prepaid and post-paid payment methods in the same account for different services, he adds, during an interaction with Business Line. We continue our conversation over the email.
Excerpts from the interview.
What are the innovations that telcos are trying out in pricing their services?
Service providers are looking to evolve the tiered pricing schemes they are offering today. All tiered pricing schemes today are based on two parameters: Quota and speed. Service providers would like to add more dimensions to this equation to create true differentiation between offers and in the market.
Dimensions could include:
* Device type – What type of device is consuming the data (iPhone, iPad, laptop or eReader)?
* Service location – Where is the subscriber now (home/office zone or roaming)?
* Network status – What is the network congestion level at that location?
* Traffic/service type – What is the nature of the data session in progress (video, VoIP, tethering, P2P or Facebook)?
* Hierarchies and priorities set by customer information – Who is the customer (business, VIP, family or government)?
Furthermore, we see an increasing number of service providers looking to launch shared data plans for consumers where a family, for example, could have one shared data quota for the entire family which would be available across the family’s devices and members.
From aspects other than data, prepaid pricing plans are also going through a transformation. From simple prepaid plans for voice and SMS we see a need for innovative plans that span across data, voice and SMS and also have dependencies between them so that the use of one service triggers benefits for another. This opens up many new possibilities for marketing teams to create new price plans for prepaid subscribers enabling them to address prepaid loyalty challenges by differentiating themselves from the competition with unique offers and top-up/recharge strategies.
According to a new research report from Ovum, 73 per cent of service providers would like to expand prepaid offerings or have already begun doing so. And the majority of service providers are also offering high-end devices such as smartphones to complement these new services, as well as extending the same to cover mobile dongles, tablets and other connected devices to generate groundswell.
However, many would argue that the extension of prepaid pricing into existing services and products is simply a natural process, hardly the sign of a market undergoing dramatic development. But it’s not just the diversification in prepaid services and devices that’s changing; business models are changing too.
One example would the emergence of the hybrid subscriber model. This model came about to answer both the demand of post-paid customers for better cost control, but also as a countermeasure to high churn rates of coveted prepaid customers. In fact, 63 per cent of service providers, mainly in North America and Europe, are planning to offer this type of model, according to the Ovum survey.
Is convergence impacting pricing decisions?
Convergence enables new pricing models and schemes to emerge. Real-time convergent charging enables the creation of a single real-time platform across all services, lines-of-business, customer types, and payment methods. This would mean that all subscribers could be treated in real-time and new models such as the hybrid customer model where the customer has both prepaid and post-paid payment methods in the same account could be enabled. New bundles of different services could be offered and elements such as cross rating between service, where the use of one service could trigger a benefit in another one, become available.
Can you describe a converged charging system? And what are the prerequisites of such a system?
A true convergent system will have one customer management with a single repository (DB) for all customers, one front end for all lines of business, and billing CRM integration. It will enable the creation of a single billing process for all customers and lines of business and cross-channel benefits and discounts at bill level. It will have one product catalogue serving a one product repository for all services and lines of business with seamless deployment of new services; and, most importantly, one charging engine serving as a single real-time charging engine for all types of events, customers, services and lines of business, offering real-time management of post-paid customer including promotions and alerts with cross discounts and benefits at rating level. It will also enable shared balances, allowances, minutes and units across all lines of business.