Sponsored By

Making a Name For Itself

Channel Partners

October 1, 1998

7 Min Read
Making a Name For Itself

Posted: 10/1998

Making a Name For Itself
Billing Concepts Seeks ‘Billing Expert’ Moniker

By Ken Branson


Alan Saltzman, president of Billing Concepts.

Billing Concepts Corp.’s name may not be on the telephone bill, but its executives are
trying to make sure the company’s behind the bill–whether billed directly or through the
local exchange carrier (LEC), processed by Billing Concepts or its carrier customers.
After spinning off from U.S. Long Distance Inc. (now USLD Communications Inc.) in 1996,
the company has worked hard to develop its own identity as a billing service bureau for
long distance carriers. Now, with its recent acquisition of a convergent billing software
firm, the company is trying to make a name for itself as billing experts with
next-generation telcos, providing advice, software and billing services.

San Antonio-based Billing Concepts estimates that it handles 65 percent of the
clearinghouse billing for long distance carriers in the United States. Since the spin-off,
the company has enjoyed a steady run of success, interrupted only by a bump in the road in
the second quarter of 1998.

That bump was related to "cramming." Cramming is the practice of billing for
services not asked for. In the spring, certain large regional Bell operating companies
(RBOCs) took down a Billing Concepts customer because of complaints about cramming.
Billing Concepts says the complaints were the result of a misunderstanding, which the
company helped iron out so its customer could be restored. At the same time, Billing
Concepts convened a series of meetings, which resulted in the Coalition to Ensure
Responsible Billing. The four members of the coalition, all clearinghouses like Billing
Concepts, agreed to screen their customers, screen the customers’ products and share
information among themselves about problem customers.

Billing Concepts’ past success and its future prospects rest on the simple act of
presenting a bill for services rendered and getting paid. Originally, the company was a
subsidiary of USLD, formed with the purpose of presenting USLD’s bills and collecting
payment. In 1996, the company broke from USLD; in June 1997, USLD’s founder, Parris H.
"Butch" Holmes Jr., left his post as chairman of USLD to devote himself full
time to Billing Concepts as its chairman and CEO.

Billing Concepts does three things for its customers: It provides billing services for
long distance companies through the LEC; it provides direct billing services for long
distance companies; and, with its recent acquisition of software company CRM Inc. (since
renamed Billing Concepts Systems), it develops and licenses billing software.

A New Focus

From making sure that one long distance company got paid, Billing Concepts has moved to
making sure many long distance companies get paid. Now, Billing Concepts wants to position
itself as a billing expert–as a provider of advice, software and billing services to all
comers. John Bain, telecom analyst at the Dallas stock brokerage Hoak Breedlove Wesneske
& Co., believes Billing Concepts is where it ought to be, and is in position to
fulfill its ambitions.

"This is all part of the general outsourcing move," he says. As industries
converge and companies merge, Bain explains, billing will become more complicated, and
companies will have to make a "classic ‘build or buy’ decision."

"Let’s suppose that, for some reason, Southwestern Bell decided to do long
distance services in Seattle," Bain says. "Would it make sense for them to do it
themselves, work through US WEST, or work with a company like Billing Concepts?"

A company that wants to do the billing itself has to conclude billing agreements with
as many of the 1,300 U.S. LECs as possible, Bain says, and Billing Concepts already has
gone through that exercise. A company that wants to do its own billing can license the
software; a company that wants Billing Concepts to handle its billing can license the
software and rely on Billing Concepts’ call centers in San Antonio and Corpus Christi,
Texas. And there are variations in between.

"We’re a one-stop shop," says Billing Concepts’ president Alan Saltzman.
"And to expand on that idea, many (service) providers have a combination of direct
billing and, for small accounts, billing to the local exchange carrier. We can provide
both services with a single relationship–as opposed to their buying software for direct
billing and then coming to us for billing to the local exchange carrier."

In addition, Saltzman says, Billing Concepts Systems allows his company to offer those
same customers the software they need to do their own billing and as much, or as little,
professional expertise as they need to run those systems. While sticking to its
clearinghouse knitting, Billing Concepts is working hard to get the attention of
competitive LECs (CLECs), next-generation telcos and what its executives call
"integrated communications providers." This expansion beyond its traditional
market is what drove Billing Concepts to acquire CRM, which had convergent billing
software but lacked the marketing muscle to make the most of it, he says.

"Many of the CLECs, they’ve already got traffic," Saltzman adds. "They
need a quick, flexible, robust billing system, and they need it now, not six months or a
year from now." Billing Concepts can turn up the system in as little as 60 days,
Saltzman notes.

The company’s future has its complications, however, including its impending jump into
deeper water with bigger fish. As processors of other people’s bills, it has 65 percent to
70 percent of its chosen market, and perhaps 10 competitors. As consultants and as
producers, installers, maintainers and managers of billing software, however, the company
faces new challenges and more potential competitors.

"Our challenges are evolving a small, product company; building the management
infrastructure; and finding the technical and management talent to bring into the
organization," Hancock says.

Saltzman says Billing Concepts is still very much "on the acquisition trail."

"I see our challenge as finding complementary products and services that we can
acquire or develop, and successfully bringing these products and services to market,"
he says, adding that Billing Concepts is particularly interested in acquiring mediation
and front-end provisioning software.

For his part, analyst Bain thinks the company’s biggest challenge may come from other
companies that have the expertise and the wherewithal to compete with Billing Concepts as
billing services companies, but who haven’t done it so far because billing isn’t their
core business.

"What I keep waiting for–and it hasn’t happened yet–is for the Bell companies to
offer billing services directly," Bain says. "After all, there’s no reason that
other companies from Arthur Anderson to PeopleSoft–couldn’t do this. But remember,
(Billing Concepts’) real strength is its existing relationship … with phone
companies."

A New Identity

Billing Concepts’ management team is concerned about another challenge as the company
expands: the branding of its services. The company’s corporate name will not change, but
its divisions shortly will be renamed to reflect its new ambitions.

The branding issue goes back to the company’s days as part of USLD. As USLD’s billing
subsidiary, the company’s services were branded Zero Plus Dialing Inc. (ZPDI) for
zero-plus billing, and U.S. Billing Inc. (USBI) for one-plus billing. It was with these
handles–especially ZPDI–that the company made its initial reputation among long distance
companies. Then, when the company was spun off, it changed its name to Billing Information
Concepts Corp. "mainly to make clear that it had nothing to do with U.S. Long
Distance any more," says Len Dedo, vice president of marketing.

However, after Billing Concepts acquired CRM, it needed to brand that acquisition as
its own. So now, Billing Concepts Corp. is the holding company and the home of the
clearinghouse operation. Billing Concepts Systems is the software business. The challenge,
executives say, is to find brand names for the company’s traditional and new functions
that reassure its present customers and help to attract new ones.

Bain, however, believes the name issue is not an issue. "I don’t think the name
makes a damned bit of difference," he says. "Billing Concepts’ main competitor
is OAN. Now, what the hell does that mean? Who cares?"

"That’s because Bain is viewing us as a clearinghouse, and not a software and
professional services company," Dedo replies. "And that’s the issue. We want to
get the pull-through on the great reputation we enjoy as a clearinghouse, and link that
with Billing Concepts as a software and professional services provider."

But Bain does understand Billing Concepts’ ambition to leverage its telecommunications
billing expertise and relationships to become the dominant software and consulting
provider for convergent billing.

"Somebody is going to do it," he says. "And this company is in as good a
position to do it as anybody. I give them a real shot."

Ken Branson is East Coast Bureau Chief for PHONE+ Magazine.

At a Glance Information

Billing Concepts Corp.

Subsidiary
Billing Concepts Systems

Headquarters
San Antonio

Business
Billing clearinghouse, service bureau and software provider to the
telecommunications industry

Sales
Three quarters ending June 30: $120 million

Profits
Net Income for three quarters ending June 30: $21 million

Executives
Chairman and CEO:
Parris H. Holmes Jr.

President and COO:
Alan W. Saltzman

Info
www.billingconcepts.com

Read more about:

Agents
Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like