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September 1, 2006
By Tara Seals
SOME NEWER MVNOS ARE
embracing a postpaid strategy (see related story), which brings different and more complicated back-office concerns from the more traditional prepaid model.
From a [postpaid] business model perspective, installing proper BSS/OSS systems is probably the greatest challenge, says BrightPoint Consulting Inc.s Alex Paskoff, senior vice president of marketing and business development. The challenges are to deploy a customer management platform, manage provisioning and mediation, customer care, rating, billing and back-end services.
So, why go postpaid? For one, it offers several advantages in terms of customer retention. While prepaid subscribers are payas- you-go, with no guarantee of bringing in a revenue stream beyond that months refill, postpaid users can sign up for subscription, session and usage-based services, while bolstering long-term cash flow for providers through contracts.
Postpaid MVNOs are in a good position to deepen their niche appeal, too. By pursuing a postpaid perspective, MVNOs can take advantage of the wealth of customer data that accrues on postpaid subscribers, says Mark Sloan, vice president of the professional services group, Convergys Corp., whose enablement framework supports more than a half-dozen MVNOs. By mining this postpaid customer data, MVNOs can launch additional services targeted to the customer segments specific needs, driving additional lifetime customer value.
However, to capitalize on postpaids benefits means having a back-office partner that can handle the corresponding mountains of subscriber information and complexities, enablers say. Any MVNOs main focus should be on marketing and growing its business, making sure it is appealing to its target market, says Jim Hunt, general manager for Voyager Billing for bcgi, which provides prepaid and postpaid billing, access management (including content filtering) and payment recharge to MVNOs on a managed service basis. No MVNO wants to or should have to deal with the back end of its business. In a postpaid scenario, the MVNO wants to ensure that it employs a billing vendor or MVNE with a postpaid billing platform that controls every aspect of service creation, subscriber activation, retail management, revenue management and subscriber care. The postpaid platform needs to be easily scalable and able to be integrated with other third-party vendors to provide prepaid and hybrid plans, as well. As well, retailers demand both prepaid and postpaid offerings to allow themselves a better opportunity to make the sale.
MVNOs should look for an MVNE, or mobile virtual network enabler, that can address certain key back-office requirements, starting with an ability to track customer information. This requires a CRM system integrated into the billing function that can easily manage and update customer data, and then apply that information to promotional offers or new services, says Tracy Fernandez, industry segment marketing manager for billing vendor Amdocs.
To do that effectively also requires a realtime transaction capability. As postpaid systems exist in the off-line world, it becomes a challenge to support transactions that require a balance or purse to be read in real time, explains Sloan. An MVNO can implement a convergent back-office architecture where certain aspects of a prepaid system are replicated within a postpaid model to provide this real-time functionality, says Sloan. It could also go the convergent charging route by implementing a platform that incorporates both network- and application-based rating and billing on one platform.
Real-time billing functionality allows postpaid providers to build promotions and bundles, but its also important for fraud control, partner settlement and managing cash flow.
From an international long-distance perspective, postpaid MVNOs may not be aware of fraudulent usage for at least 30 days, says Gavin Macomber, executive vice president and co-founder of MobileSphere Ltd., an MVNE. As MobileSphere has realtime billing and user-specific monthly spending limits, we mitigate or even eliminate fraud and bad debt concerns for our postpaid MVNO customers.
Confusion as to charges and bill shock is another postpaid stumbling block that can lead to bad debt. While traditional voice services are relatively simple for users to understand, rated on a per-minute basis, pricing for content services can be more complicated. If a user wants to talk on the phone, use SMS, download a ringtone and watch a video clip, those may all be rated in different ways, says Amdocs Fernandez. Customers who use these services but dont pay can traditionally account for nearly 2 percent of a service providers revenue.
A loss-prevention technique lies in addressing credit verification, spending controls and collection issues. Systems must be able to flag past-due accounts, initiate an action (i.e., send reminder e-mails to customers after specified number of days) and track the process to resolution.
MVNOs are looking to sign up new customers quickly, so their systems also need to have the capability to perform real-time credit verifications, says Fernandez. This includes across multiple channels such as the call center and Web site. This is a very complicated process and, if not managed efficiently, it can easily turn off potential new customers.
Whether its customer data, real-time transactions, the ability to bundle services with different rating mechanisms, fraud control or one of the other myriad postpaid issues, postpaid MVNO success is tightly wrapped in with the back office.
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