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Table of Contents
Billing and custom care systems convert the bits and bytes of digital infor-
mation within a network into the money that will be received by the service
provider. To accomplish this, these systems provide account activation and
tracking, service feature selection, selection of billing rates for specific calls,
invoice creation, payment entry and management of communication with
the customer.
Billing and customer care systems are the link between end users and the
telecommunications service provider. Telecommunications service providers
manage and setup the networks to allow customers to communicate (provi-
sioning), and bill end users for their use of the system. Customers who need
telecommunication services select carriers by evaluating service and equip-
ment costs, reviewing the reliability of the network, and comparing how spe-
cific services (features) match their communication needs. Because most
network operations have access to systems with the same technology,
Because most Telecommunications Service Providers offer essentially the
same types of services and network facilities, Billing & Customer Care are
becoming key differentiating factors and play a critical role in the cus-
tomer’s carrier selection decision.
There are many different types of services to be supplied and billed. These
include traditional voice and data communications, short messaging, fax,
and information services. The billing process involves receiving Usage
Detail Records (UDR) from various network elements, determining the
billing rates associated with each UDR, calculating its charge, aggregating
Billing system costs can “eat up” a substantial percentage of revenues col-
lected. In addition to the initial acquisition cost of computers and software,
operational costs tend to be very high. Of the service provider’s staff, typi-
cally 20%-30% are directly or indirectly engaged in providing billing and
customer care support.
There are many billing standards that have been developed for telecommu-
nications networks. Because the services offered by different types of net-
work operators (e.g. cable television compared to local telephone companies)
are beginning to overlap, billing standards are also converging.
Future trends and challenges for billing systems include the proliferation of
new types of services to support, telephone number portability that compli-
cates account identification, and increased customer self care to reduce the
burden (and cost) of billing systems.
Figure 1.1 shows an overview of a billing and customer care system. This
diagram shows the key steps for billing systems. First, the network records
events that contain usage information (for example, connection time) that is
related to a specific call. Next, these events are combined and reformatted
into a single call detail record (CDR). Because these events only contain
network usage information, the identity of the user must be matched (guid-
ed) to the call detail record and the charging rate for the call must be deter-
mined. After the total charge for the call is calculated using the charging
rate, the billing record is updated and is sent to a bill pool (list of ready-to-
bill call records). Periodically, a bill is produced for the customer and as
payments are received, they are recorded (posted) to the customer’s account.
Introduction to Billing
Types of Services
There types of services that a customer may use in a network include net-
work access (basic information transfer), voice and data services over fixed
line and mobile networks, Internet Protocol (IP) service (such as email), and
content delivery (current traffic information for example). When the com-
munication service involves system access through different networks, the
event is normally routed through a toll center and a toll charge may apply.
A toll is any message telecommunications charge for services provided
beyond a local calling area.
The typical billing process involves collecting usage information from net-
work equipment (such as switches), formatting the usage information into
records that a billing system can understand, transferring these records to
a Rating Engine, that assigns charges to each record, receiving and record-
ing payments from the customers, and creating invoices.
Figure 1.2 shows a standard Billing and Customer Care process. In this dia-
gram, the customer interacts with Customer Care or works with an activa-
tion agent to establish a new wireless account. The agent (CSR) enters the
customer’s service preferences into the system, checks for credit worthiness,
and provides the customer with a phone number so that the customer may
make and receive calls through the mobile telephone network. As the cus-
tomer makes calls, the connections made by the network (such as switches)
create Usage Detail Records (UDR) of the activities. These UDRs include
the identification of the customer and other information relevant to the
billing system. The billing system also receives records from other carriers
(such as a long distance service provider, or roaming partners). The billing
system then reformats the UDRs into an internal layout that is proprietary
to the carrier, guides and updates the UDRs with correct customer and rat-
ing information. After each UDR has been rated according to the customer’s
rate plan, it is stored in a “Bill Pool”. The Bill Pool is a data store contain-
ing all UDRs that have been rated and are waiting for the month-end cycle
billing process to aggregate them and display them on a customer’s bill.
The customer then sends his payment to the telecom service provider.
Payments are recorded (posted) in the financial system. Customer’s bills
are archived in “Billing History” files. These files are used heavily by vari-
ous organizations within the enterprise: Customer Care (inquiries, adjust-
ments, service order, etc.), Marketing (product analysis), Finance (revenue
management, revenue projections, profitability, etc.), Audit, and Revenue
Assurance.
Many real-time billing systems use Remote Access Dial In User Server
(RADIUS) to limit access to the system to registered and authorized cus-
tomers. RADIUS is network protocol that operates on a network server
(software program and database); it receives identification information from
a potential user of a network service, authenticates the identity of the user,
validates the authorization to use the requested service, and creates event
information for accounting purposes.
Real time billing may also provide for better customer care and Provide
Advice Of Charge (AOC) information. AOC provides the ability of a
telecommunications system to advise of the actual costs of telecommunica-
tions event either prior to or after the occurrence of the event. For some sys-
tems, (such as a mobile phone system) the AOC feature is delivered by
Short Message Service (SMS).
Figure 1.3 shows a real time prepaid billing system. This diagram shows
that the customer initiates a call to a prepaid switching gateway. The gate-
way gathers the account information by either prompting the user or by
querying the incoming call for an Id (e.g. prepaid wireless telephone num-
ber). The gateway sends the account information (dialed digits and account
number) to the real time rating system. The real time rating system identi-
fies the correct rate table (e.g. peak time or off peak time) and determines
the account’s remaining balance. Using the rate information, the call desti-
nation, and balance available, the real time rating system calculates the
maximum allowable duration for the call. . This information is sent back to
the gateway and the gateway completes (connects) the call. While the call is
in progress, the gateway maintains a timer so the caller cannot exceed the
maximum amount of time. After the call is complete (either caller hangs
up), the gateway sends a message to the real time rating system that con-
taining the actual amount of time that was used. The real time rating sys-
tem uses the time and rate information to calculate the actual charge for
the call. The system then updates the account balance (decreased by the
charge for the call).
Multilingual Support
Multiple Currencies
Inter-carrier Settlements
Billing Process
Billing and customer care systems may be developed and managed by inter-
nal staff or contracted to other companies (outsourced). Companies that
provide complete managed billing and/or customer care services (called
turnkey) to other companies are called service bureaus.
Billing system events are measures of network usage. Events can be stored
in the network device (Data Collector) for transfer at predetermined time
intervals, when a specific value has been reached (event trigger) or when the
billing system requests the information (called polling).
Some common event sources include central office switches, routers, and
application servers. Central office switches are devices that route calls from
one subscriber to another. They track the time one port is connected to
another port. Routers are intelligent switches that forward packets toward
their destination based on their routing address (and possibly type of con-
tent). Routers can track the amount of data that is routed between two
ports over a period of time. Application servers are computers that process
information at the request of a customer (called a client), and can track the
beginning (launching) and termination of an application.
Mediation Devices
There are other network parts or devices that may be involved with con-
necting a call or providing Value Added Services (VAS). These devices also
can produce cal detail records and these records are in a different format.
Figure 1.4 shows a mediation system that takes call detail records from sev-
eral different switches and reformats them into standard call detail records
that are sent to the billing system. This diagram shows that the mediation
device is capable of receiving and decoding proprietary data formats from
“Usage Detail Record (UDR)” and often contains non-telephony billing infor-
mation such as: a downloaded movie, or IP content.
Figure 1.5 shows the basic structure of a call detail record. This diagram
shows that a UDR contains a unique identification number, the originator
of the call, the called number, the start and end time of the call. This dia-
gram also shows an additional charge for operator assistance and that a
UDR dynamically grows as more relevant information becomes available.
Typically there are two major components to Billing systems: the Rating
Engine (sometimes known as “front-end”) and the Invoicing Engine (some-
times known as “back end”, “Cycle Billing”, or “Month-End Process”). The
Rating Engine accepts UDRs from a service providers’ own switches or from
other providers or billing companies’ systems (sometimes called incollects,
or in-roamers), checks the validity of billing records, matches billing records
to customers in a database, and provides billing details to other systems
(sometimes called outcollects, or out-roamers). The Rating Engine also
guides billing records to specific customer accounts. Guiding uses the
event’s identification information such as the calling telephone number to
match the billing record to a specific customer account.
The Invoicing Engine aggregates billing records for a specific period (billing
cycle), calculates recurring charges (e.g. monthly charges) and total usage
charges (minutes or quantity of usage), and produces invoices.
As part of the billing system, the Rating Engine receives call details from
various sources (event records), reformats and edits these into UDRs,
assigns a customer account to the UDR (guiding), calculates call charges for
each UDR, and gets the UDR ready for Invoicing.
Each UDR is rated individually after having been assigned a rating band or
category first. After a UDR has been rated and the actual charge for the call
is calculated, it is stored in a “pool” of billing records that are ready to be
invoiced (called a bill pool). A bill pool is a group of call records that have
Figure 1.6 shows the basic functions of the Rating Engine. This diagram
shows how different event sources are received from various network ele-
ments or from other companies that have provided services to your cus-
tomers. These records are reformatted to a common UDR format and dupli-
cate UDRs are eliminated. Identification information in each UDR is used
to guide (match) the record to an account in the customer database. The
customer’s information determines the rate plan to use in charge calcula-
tion. The rating process uses rate tables, the customers selected rate plan,
and other information (e.g. rate band, distance, time of day) to calculate the
actual charge for each call. All of the information is added to the UDR and
it is either placed in the bill pool (ready for billing), or it is sent to another
company to be billed if the customer identification is not part of this net-
work’s customer database. If there are any problems as the UDR is being
processed, it is sent to Exception Investigation for further analysis.
It may be necessary to divide the UDR into several components parts. For
example, a call from a mobile telephone may be divided into airtime, land-
line usage, and long distance usage.
UDRs are commonly processed using a single rating software module. This
module uses rate plan identification information found on the UDR (deter-
mined after the guiding process) to match to rate tables that allows a per
unit increment rate. Rate increments can vary based on the time of day
(TOD), day of week (DOW), holidays, and other factors. After the call rate
has been determined, the Rating Engine places an initial value on the call.
It may be necessary to re-rate the call based on information received after
initial rating was calculated. Examples of this include: usage discounts
(free minutes), toll free calls (called party pays), and calls billed using an old
rate table after a customer has selected a new rate plan.
The Invoicing Engine uses data from the updated bill pool and adds non-call
related billing charges and financial adjustments. The billing system then
adds fixed recurring charges (such as monthly service fees and taxes),
applies payments that have been received, produces invoices, and maintains
a history database.
Figure 1.7 shows the basic activities performed by the month-end process.
This diagram shows that the first step in this process is the selection of cus-
tomers whose cycle is to be billed during this “bill run”. For each customer
to be billed, all usage having occurred before the cutoff date is then select-
ed. The next step is for the usage to be aggregated according to the way in
which it will appear on the customer’s bill; this step also includes the calcu-
lation of any volume discounts to which the customer has subscribed. Fixed
charges – both recurring and non-recurring – are then calculated according
to the product information retrieved from the product portfolio database.
Taxes and surcharges are then calculated (Federal, State, Local, FCC,
Universal Service Fund, etc.) and the financial chart of accounts is updated
with the debits and credits. Finally marketing and other messages are
inserted into the customer’s invoice, which is then sent to a production facil-
ity (print shop, CD-ROM duplication, Internet website, etc.) for delivery to
the customer. The invoice is then archived in the Billing History database,
and various reports are generated, such as financial reports, reconciliation
reports, analysis reports, etc.
Clearinghouse
addition of charges for services that were not agreed to by the end customer.
Slamming is the unauthorized transfer of customer’s preferred service
provider to a different service provider. When errors or omissions are
detected, individual UDRs or entire batches of billing records may be
flagged for return to the sender and they may be tagged for further investi-
gation.
Invoices
Invoices contain the details of how much the customer should pay to the car-
rier, when the amount is due, and other information regarding the bill.
Invoices usually provide a customer with detailed information regarding the
source of the charge (date and location), reasons for the charge (service pro-
vided), and the amount of the charge. Figure 1.8 shows a sample invoice.
Management Reporting
Invoicing
Processing Payments
The billing system records financial details (receivables) for the carrier.
Periodically, summary information is transferred into the General Ledger
(G/L) of the carrier’s accounting system. This summary posting groups dif-
ferent types of billing charges into summary totals to be posted to different
financial accounts. These types of accounts include receivables or expenses,
and each financial account is assigned a unique number (in the financial
chart of accounts). For example, payments received by credit card are usu-
ally categorized differently than payments received by cash and these totals
will be recorded in accounts with different account numbers.
Account Activation
Account Management
Billing system costs include the initial hardware, software costs of the sys-
tem along with the operational costs such as invoice processing, bill print-
ing and mailing, intermediary clearing house settlement companies, cus-
tomer care (call centers), and collection services.
If a company has many customers, they are typically divided into cycles (or
“billing cycles.”) The billing cycles are different for groups of customers.
This allows the billing system to bill only a portion of the customers at a
time.
In most cases, invoice records are sent to a bill printing facility or they may
be sent by email or printed by the customer when the payment is made
online. Bills that are sent to the printer and mailing house usually cost
between $1-$3 per bill. Sending bills by email helps to reduce the cost of
providing the customers with bills and receipts.
Call Center
Call center telephone systems can cost over $3,000 per CSR station. The
average telecommunications service provider has 1-2 CSRs for every 10,000
customers. This results in an average customer care call costing $7-$10 per
call.
Figure 1.9 shows a typical call center. This diagram shows that calls may
be received or originated from the call center. The customer traditionally
communicates with the call center by telephone. When a call is received by
a call center, the user is typically provides with a list of options by an auto-
mated interactive voice response (IVR) unit. As the user selects from the list
of options, an ACD system routes the call to a CSR station that is qualified
to assist the customer (e.g. sales agent or technician). When the CSR agent
answers the call, some of the customer’s account information may become
available on the CSR’s computer screen (“screen pop”). The CSR will com-
municate with the customers and should make notes in the customer’s
account regarding the activity that progressed.
Collections
When customers are first added to a system, they are “scored” on the prob-
ability that they will pay their bills. Using information on their application
and reviewing the credit history as provided by an independent credit
reporting agency accomplishes this.
If all attempts to collect from a customer have failed, a service provider may
write off the uncollected revenue as bad debt, retain a collection agency or
sell the uncollected invoice(s) to a collection service. If the account is writ-
ten off as bad debt, the customer’s information is usually placed in a nega-
tive file to avoid reactivation and their poor payment history is reported to
a credit reporting agency. Various collection companies (collection agencies)
offer collection services that work on a percentage of collected revenue.
Some collection companies will pay for uncollected invoices. When uncol-
lected invoices are sold to collection services, the service provider is usually
prohibited from working with the customer in the future regarding payment
on the account.
Billing Standards
Billing standards define the measurements, record format and the methods
of transfer for billing related information within a network. New services
are being offered by network operation because of deregulation of the
telecommunications industries around the world. As a result, billing stan-
dards are continually being revised and they are converging. Because com-
panies can use different billing standards or different revisions of billing
standards, clearinghouses often provide translation services between differ-
ent billing standard formats.
Due to the global nature of 3G wireless and GSM, the TAP billing standard
provides solutions for multi-lingual and multiple exchange rate issues.
TAP3 was released in 2000 as a significant revision of TAP2. TAP3 has
changed from the fixed record size used in TAP2 to variable record size and
TAP3 offers billing information for many new types of services such as
billing for short messaging and other information services. The GSM asso-
ciation (www.GSMmobile.com) manages the TAP standard.
The IPDR structure is very flexible and new billing attributes (fields) are
being added because Internet services are now offered in almost all commu-
nications systems. The NMD-U standard is managed by the IPDR organi-
zation (www.IPDR.org.)
The Interim Standard 124 (IS-124) standard allows for the real time trans-
mission of billing records between different systems, primarily between
wireless systems in the Americas. IS-124 messaging is independent of
underlying technology and can be sent over X.25 or SS7 signaling links.
Good billing and customer care systems are a key part of the success of a
telecommunications service provider. The key issues for future billing and
customer care systems include offering network services, the ability to cap-
ture customers from the competitor, and cost effective management of cus-
tomers.
ASP company owns or leases computer hardware and software systems that
allow one or more users to access applications and information services on
its server. ASPs usually have use or have relationships with telecommuni-
cations service providers to offers application services to their (the Telcos’)
customers. Examples of applications services include weather reporting,
stock quotes, and Internet telephony services.
Local Number Portability provides the ability for customers to keep their
telephone number independent of their local service provider, services sub-
scribed to, and geographic location. This creates a variety of challenges for
billing and customer care, such as the ability to determine whether the ter-
minating number is “ported” and calculating distance-based rates.
There are three key parts to number portability, local carrier portability,
service portability, and geographic portability. Local carrier portability
allows the customer to switch from one local carrier to a competing local car-
rier and keep the same telephone number. Service number portability
allows customers to keep their phone numbers when they change type of
service. For example, a customer could transfer his wired home telephone
service to a mobile wireless telephone service provider who is located in his
local area. Geographic number portability allows the customers to take
their telephone numbers (area code and local exchange number) with them
regardless of their location within the country.
To offer number portability, two numbers are required. The first number, a
Location Routing Number (LRN), identifies the new location, new serving
switch, and type of service of the customer. The second number is the “old”
telephone that the customer is known by to the outside world. When a “port-
ed” customer’s telephone number is dialed, the customer’s LRN is used to
determine the location of the switch that will terminate the call.
Local number portability complicates the billing system’s ability to identify
the customer and apply location-sensitive rates.
Customer Self-Care
Customer self care is the process of a allowing the customer to review, acti-
vate, or disable services without the direct assistance of a Customer Service
Representative (CSR). Customer self care can be as simple as providing
account billing information to the customer by telephone through the use of
an interactive voice response (IVR) system to providing interactive service
activation menus on an Internet web site.
Figure 1.11 shows that a customer self-care system can be used to review
product or service options, check billing records, and change customer fea-
ture options (called “provisioning”). This diagram shows that the customer
can contact the billing and customer care system via a gateway. The gate-
way may contain Internet web access (for graphic displays) or interactive
voice response (IVR) systems to allow the customer to select their account,
receive billing and customer care information, and possibly change features
and options.