Why Telcos Must Make Convergent Charging the New Engine for Growth

The prime drivers to adopt convergent charging include cost reduction, customer experience and competition. Each of these drivers needs to be explored and understood before implementing a convergent charging model.

For the first time in the history of the telecom industry analysts are forecasting that by 2018 mobile revenues will contract. The prime challenges Communication Service Providers (CSP) face include margin pressures due to slowing revenue, increased customer churn, competition from Over the Top (OTT) providers and a lack of innovation around new services to boost revenues. On the other hand, CAPEX doesn’t appear to be shrinking. CSPs continue to invest 15%-20% of total costs in network and IT infrastructure to extract the best out of their existing estate and improve customer experience.

The problem is that most CSPs function in multiple charging silos, limiting the launch of new, innovative and personalized services with users in control of consumption. This paper looks at the opportunities and constraints around a convergent charging system that can free CSPs from their current challenges and help roll out new services irrespective of them being pre-paid or post-paid.

The prime drivers to adopt convergent charging include cost reduction, customer experience and competition. Each of these drivers needs to be explored and understood before implementing a convergent charging model.

Cost Reduction

Most CSPs, with a few green field exceptions, have implemented pre-paid and post-paid as disparate systems and as different businesses. When products and services offered to customers are priced and charged in different systems, maintenance of both systems becomes complex and expensive. Convergence can enable significant cost reductions through consolidation of software licenses, vendors, contracts and diverse skills running the billing operation. In addition, CSPs will dramatically improve time-to-market for new products/ services. The financial and business benefits delivered in the long term will outweigh the transition cost to a convergent charging environment.

Customer Experience

It has become important to remain customer centric by combining innovative services with attractive pricing and a great experience. This means empowering customers to personalize and control services plus get rewarded through offers and discounts. The goal must be to seal their loyalty and influence them to increase their usage of voice, messaging and data.

Customers – individuals, families, businesses -- have a strong urge to control the cost of services consumed by them. Converged pre-paid and post-paid charging will unlock a huge potential for CSPs and help tap the benefits of this urge. Convergent charging will facilitate hybrid offers with a mix of pre-paid and post-paid services, giving the customer greater flexibility and choice. Some of the typical hybrid variant scenariosare