Fierce competition and increasing customer expectations are encouraging telecom operators to focus more on enhanced customer experience. On the one hand, operators want to be the first in the market to launch new innovative offers and to differentiate from competition. On the other hand, the customers are more and more demanding: any billing error directly impacts either the operator revenues, either the company reputation.
Quick time-to-market means high risk of incurring billing errors. Unfortunately the communication networks, the information processes & systems are not the flawless network components most people think they are! The reduced time for test cycles leads to higher risks of billing errors when launching new offers and new rate plans. This is why operators need to perform tests in a timely, proactive and targeted way. Simply to detect billing errors before they turn into customer complaints or revenue leakages.
Premium Rate Services (PRS) are high-tariff services which account for 2 to 4 % of the annual mobile operator revenues (European average). Surprisingly, PRS billing is hardly monitored today despite customer complaints due to the lack of tariff awareness and / or billing errors. PRS also squeeze the operator margin due to the high costs charged by PRS partners. Any error can be immediately turned into a cash machine by professional fraudsters that constantly monitors the market.
Retail billing of PRS requires special monitoring because the charging principles are more complex and may include: flat fee rates, time-dependent rates (including a minimum/maximum charge per call), variable rates (depending on options selected by the subscriber), fees for additional services, special VAT schemes, etc.
Moreover PRS are usually outside the core package rate plans which result in limited testing and in billing errors being undetected. This may have a huge impact, e.g. a mobile operator in Europe recently had to refund €1.9 million to subscribers who had been billed incorrectly for 3 years for calls made to third-party premium rate numbers.
4G LTE: risk higher than ever for lost revenues?
4G LTE is now starting to drastically change the use of mobile data services. But, while mobile data traffic is growing exponentially, revenues paid by subscribers are either flat or declining due to intense competition. “How to price and bill for data services?” is still the most important issue which mobile operators are facing today!
Data transactions are currently usually rated and charged by volume; 'unlimited' data plans are still very popular even if operators are keen to phase them out. Operators are also experimenting with alternative models e.g. pricing by event or by duration of usage. On top of this, they often also promote the use of data services passes for infrequent data users or roamers. More recently, other sophisticated data plans are emerging in the market, such as tiered-data plans, application-based models, service bundles, turbo boost, device-based plans, shared data bundles,...
As pricing and billing strategies are becoming more complicated and diverse in an attempt to maximise revenues from data services, new risks must be addressed by the operators: