The new bare necessities

One of the more intriguing notions that I have heard lately - ironically, at the recent Billing '99 conference - was a theory that the practice of billing as we know it eventually will become obsolete. Even more ironic was the fact that an executive with a software billing company voiced the notion.

The point, of course, was not that carriers should eventually stop collecting revenue. The theory was that as the costs of network connectivity and transport continue to plummet, the relatively expensive process of gathering transactional records, producing invoices and collecting fees will become a revenue drain.

It's a valid concern, especially if transport and connectivity are the only components of the service and revenue equation. Consider the many flat-rate (and inexpensive) plans available for unlimited dial-up Internet access, or the wireless carriers that are giving away long-distance, call waiting and caller ID as part of their single-rate bucket plans. When competition eventually pushes prices to the minimum and churn to the maximum, will it become too much of an economic burden to acquire and keep a customer that buys only basic services?

That's an extreme scenario, of course, and one that isn't likely to occur if service providers take a number of preventative measures - and if their software vendors supply them with the tools to do so.

Carriers have long known the importance of the value-add. Look at any residential telephone bill: The $9.95 basic line charge doesn't make up the majority of the balance - the add-on services put the total in the high double-digits. Likewise, a bill for basic CATV service is supplemented by charges for extras such as movie channels and pay-per-view programming.

The concept of service enhancement becomes even more crucial in a data-oriented communications environment where content - not just connectivity - is the ultimate revenue driver. How can an Internet service provider increase the value of a flat-rate customer? Charge an added premium for access to exclusive, customized data made available through relationships with content developers. How can a wireless operator move its customers away from voice-centric usage? Introduce one of the increasingly ubiquitous wireless portal services that allow Internet content to be delivered to handsets - at an additional charge to customers.

Developers of billing software are adapting their systems to include transactional processing capabilities that can help carriers secure added revenue from added services. That moves the value proposition away from connectivity and toward content. But it doesn't stop there.

The other major component of a billing vendor's business is customer care - a relative term if there ever was one. These are systems that, in theory, help customer service representatives better assist customers with service and billing issues. Most billing software vendors also are adding "decision support" or "risk management" functions that help identify enhancements that can boost revenue further.

We're not just talking about tacking on additional charges to the accounts of individual customers. These types of systems can be used to analyze and potentially raise revenue intake from the largest and most lucrative corporate customers.

But no matter how effective a churn-prevention software program or decision support system might be, the customer relationship ultimately depends on the interaction between the customer and the CSR. This is the point where all of a carrier's infrastructure and software investments can go down the drain.

With the combination of higher stakes and carriers' reputations for poor customer service, the next step - unfortunately, from a societal standpoint - is to eliminate the human variable. Web-based customer interfaces are the emerging answer. While human interaction between carriers and their high-stakes customers will continue to be important, day-to-day interaction about billing and service options should be electronic to minimize the risk of customer alienation. For that to be possible, software developers must adapt their platforms to function in a Web-based scenario.

All of this hinges on a carrier's desire and ability to put the required systems in place to create and provide these types of service enhancements, and to support activation and billing with the appropriate operations platforms. When they do, the idea that their transport and connectivity lifeblood is oozing value by the minute might become a little less alarming.