MVNOs - Billing Makes the BRAND
3GSM World Congress 2005 Trade Show Daily
By Amos Sivan

Key Words: MVNO Billing, Real Time Rating, MVNO Software
 

The Mobile Virtual Network Operator ("MVNO") is transforming the mobile telecoms industry and is set to make the same impact in fixed communications. TDC Mobile could not beat Telmore and eventually bought the company. More are being announced - EasyMobile, the multi-level marketers (ACN), the supermarket chains (Tesco, Albert Heijn) and the global brands like ESPN and Disney. Not all succeed and many existing MVNOs need to transform their businesses. In order to answer an MVNO's system requirements and to create a successful business an MVNO needs three core capabilities:

• Brand - but a Brand alone is not enough; it must have an active community and an affinity with the MVNO product bundling.
• Distribution channels to the heart of this community.
• Built in cost control through all aspects of the business.

For these MVNOs to be superior and properly extend their brand ("BRANDwidth") into the fast moving next-generation telecom market, cross sell their products and broaden streams of revenue, they need a flexible powerful rating, billing and Customer Relationship Management (CRM) system.

The billing function for MVNOs is very different from a traditional network operator. MVNOs are able to offer a wider range of products based on mobile, fixed and broadband networks supplemented with high-margin content services; bundle and package these products in revolutionary ways to wrong-foot the network operators; and frequently must operate in multiple countries to support their brand communities. Integrating CRM elements into the billing function enables the MVNO to ensure the customer satisfaction expected by their community, up-sell new and improved services and widen its BRANDwidth.

This article addresses these issues and offers an insight into the important connection between CRM and billing that is needed to ensure success for current and next generation MVNOs.
A Tough Balancing ActThe hallmark of successful MVNOs is that they unerringly reach their customers with attractive packages:

• EasyMobile customers know everything will be through the internet, Albert Hein customers top-up at the checkout; the multi-level marketers have an army of agents that talk daily with their customers. These established distribution channels have an incremental cost to the MVNO.
• Product bundling attacks operator weaknesses for example through SIM only packages that leave operators subsidizing handsets; it gives new possibilities to customers and is always cheaper than the operator packages.
• The smartest MVNOs build viral features into products that encourage other community members to join the club.
• And by building knowledge of their community the MVNOs are able to refine services and introduce new product concepts with a high success rate.
  

However it is not easy for MVNOs. How do you balance the brand expectations of your customers with the imperative to be a cost leader? For many MVNOs the market success masks a stressed out organization working ever more frantically just to keep up. Eventually something has to give and usually it is the customers - who give up and go back to existing providers.

A MVNO can maintain the right balance if it has a billing and CRM system designed for its business model.
The Right Balance

The billing systems for the MVNO must be capable of rating and billing for voice calls and data sessions for each subscriber, often without a monthly invoice. They must have the complete ability to cross discount and add incentive functionality to ensure that the brand expands.

A billing system must implement the Multi concept in a single installation:

• multiple companies, perhaps operating in different countries and currencies;
• multiple markets and segments with multiple packages and processes;
• multiple product sets that can incorporate any telecom service but should extend to content TV, utilities and other services
  

A key-factor for an MVNO's success is providing its customers with value added services, and this depends on a real-time rating engine. The engine needs to actively check all subscribers' balances and authorize or prevent further transactions based on the cost of each transaction as a function of the credit left in the 'credit banks' of the prepaid user. What is more product differentiation can be built by helping postpaid customers actively control their budget. An interactive billing system can 'tell' customers when they are approaching their spend limits, inform them of discounts earned, and enable them to spend more - all through their preferred channel - SMS, email, web or IVR.

The most effective engine has its foundation in an advanced, event-based workflow engine concept (sometimes known as a Decision Operating Tree or DO tree). This workflow concept enables the business plan to be realized through business rules in determining the decisions to take at each step of the rating and billing process.

This advanced rating engine must support value based rating initiated by any network, customer or time event, charging by attributes such as duration, QoS, volume and others; content based rating originating from content information such as a MMS, ringtones, games, etc.; customer based rating founded upon the customer's definition; or even accumulation based rating centered upon meeting the required elements for discounting activities. The engine must be attribute independent - in other words, it can refer to and make decisions based on any attribute, be it an accumulated value, customer balance, customer information, event attribute, etc. And when new services are defined, the system immediately self configures to use and operate that service's attributes.

The secret of successful product packaging is that it appears incredibly simple to the customer and yet usually this requires huge flexibility and capability in the support systems.


Ongoing Customer Interaction

To implement differentiated products the ideal MVNO billing system should interact with the customer. The system must count and store information about customer activity and use this data in real-time. These 'banks' can hold customer balances of any type of attributed 'accumulation' (minutes, SMS, downloads etc). The banks can be "credited" or "debited" in line with the MVNO's policies or with the subscriber's profile. The active banks for a teenager would be suited to his or her lifestyle. These might include music, cinema, clothing and concert tickets, whereas a thirty-something mother might have different banks including supermarket coupons, toys and restaurant vouchers. The savvy MVNO will be constantly refining as many profiles as possible to ensure that the active banks remain relevant and attractive to each subscriber.

The bank model encourages the subscriber to use the MVNO's services for voice calls or data sessions to further sell the brand and cross promote. Higher usage is "rewarded" with credits and after further usage the active bank will reach a pre-defined threshold level whereby the accumulated credits can be converted into a real voucher. The voucher can be sent by SMS, e-mail, IVR or to a messaging platform. Examples of 'bank' reward transactions might include:

• Cross branding between linked brands (EasyMobile + EasyJet, etc)
• Mileage / loyalty points with airlines, rent-a-car or hotels
• Free or discounted food or drink at a local store, bar or restaurant
• A 20% discount for the cinema or the 'Brand' store

The real-time, multi-dimensional nature of future service usage necessitates a completely open approach to service creation and deployment. Each transaction is a pathway to multiple rewards for the subscriber and multiple marketing channels for the MVNO.


CRM - The Backbone of Effective MVNO Service

Service efficiency and cost control requires a tight integration between a highly efficient billing system and a comprehensive CRM environment. For the MVNO, this means:

• CRM to capture, store and present the customer data it needs to be more responsive to customers than existing providers. The contact channel, be it call-center, web or store must have the real-time data about customer usage. The agent needs to respond in the customer language and be a one-stop shop to resolve issues.
• CRM to build an information store to know its customer. This knowledge is essential for it to maximize the investment in the MVNO operation. The ability to identify latent needs, to model and target products can not only create killer offers but can prevent expensive follies. Integrating this knowledge into campaign management tools makes it immediately useful.

With customer knowledge permeating the billing system, the operator can act. High risk customers can be wooed with personalized promotions that bring them back into the fold; content services can be targeted at receptive customers. Up-selling high margin services like content to customers are the way to put a real shine on profit figures.

The service provided to customers must be the real differentiator in the MVNO market. It is relatively easy to win the customer acquisition battle - superior customer service wins the war of retention. After all, the best brands are nimble and move quickly with the market or ahead of it to provide the services required by their customers.


Conclusion:

In the myriad of billing solutions available today, there are very few that can offer an effective solution for an innovative MVNO. It will need to handle current and expected network usage, and also be capable of incorporating the requirements of the next-generation premium content and future services. It must incorporate CRM elements so that the MVNO widens its BRANDwidth and makes the successful up-sell of new and improved services. The right choice means an MVNO simply becomes the telecom arm of the brand name and, an almost immediate revenue generator.

Amos Sivan is the CEO of FTS - Formula Telecom Solutions (www.fts-soft.com), a Billing & CRM company. Mr. Sivan has over 25 years experience in wireline and wireless telecommunications. He can be reached at: press@fts-soft.com