In this retrospective article, Doug Melbourne takes us down memory lane to recount his early days of telecoms billing back in the 90s to the complexities of calculating today’s bill. From pulse-based billing systems, to time-and-distance billing, to billing for quad-play bundling – who knew that a simple phone bill could be so tricky? Join us on his 25-year journey.
By Doug Melbourne
Have You Paid For That, Sonny? The Evolution of Telecoms Billing
I have been in the telecoms industry for thirty years. I went into telecom/broadcasting straight from college, two years after the first mobile phone was launched in 1984. They were huge, walkie-talkie styled objects owned by a small number of people and…you could make phone calls with them – if you were lucky – and strong enough to hold it to your ear for an hour.
Today, I can walk down a busy street having a conversation via my wireless Bluetooth® headset with someone on the International Space Station, whilst downloading music, watching the news, and playing “Angry Birds”, all at the same time.
Obviously, if I did all these things at once while walking down a busy street, I would probably meet with a terrible accident. The battery life hasn’t improved that much, either.
But I digress. For most of my career, I have worked in the field of BSS (Business Support Systems) and those parts of a telecoms infrastructure dealing with rating, billing, and collections. Since those early days, my chosen field (actually, it seemed to choose me) has changed dramatically.
When I first encountered telephony billing, most of it was based on charging you for the destination of the person you were calling, and how far away you were from there. There was a variable rate for peak and off-peak times. Oh – and some premium rate lines for your bookies, or the weather, or your horoscope. That was about it! When you made a phone call, a CDR (Call Detail Record) was created which contained all the information you needed to price that call. It was held on the switch until it was collected (once or twice a day) and then used to price the call according to your rating tables. At the end of the month, these rated call records would be added up and a bill would emerge. A customer’s phone bill was also fairly straightforward: a simple total of the calls and some indication of what sort of calls they were. No complicated discounts, no special customer messages, no other services to be itemised.
In fact, in the early 90s, I worked on one project in Poland where they were still using pulses for measuring the value of the call. I had the dubious pleasure of converting their price list from “number of pulses that… pulsed during a call” to the more familiar time-and-distance based scenario. Not too bad you might think, but it wasn’t so much the basic conversion that was a pain. No, the pain was in the fact that there were always discounts – as part of a promotion, or sometimes permanent discounts for one reason or another. It wasn’t unusual for a customer to qualify for more than one discount at the same time. So…do you apply both discounts against the full price of the call? Or do you work out the second discount against the already discounted amount? Or do you just apply whichever one is biggest? Etc. And believe me, when you try to work out the equivalent price of a five minute call to Zakopane from Warsaw for a customer with a student discount, with an additional Christmas discount, during peak time, you start to lose the will to live.
I don’t think there are too many pulse based billing systems left in the world, but while the time-and-distance based charging method still persists, mainly on fixed lines, billing has become a mind-bogglingly complicated area of technical and conceptual challenges.
The exponential growth of mobile (take a look at our “Rise of Mobile Phone Adoption” data visualization[i]) started to move billing away from the whole time-and-distance thing, and introduced the concept of ‘bundles’. The differentials now could be between whether your call was to someone on the same network, or on a rival mobile network, or a fixed line provider; ‘off-net’ versus ‘on-net’. In other words, along with ‘bundles’ came more billing complexity. The bills looked the same but the work going on behind the scenes to figure all that stuff out required many, many changes.
Prepay mobiles brought their own challenges. Now with prepay, the cost of what you were doing with your phone had to be calculated instantly. This led initially to simpler tariffs; the necessary calculations of balance decrements and top-ups were carried out on platforms closer to the network on which the calls were trafficked.
That didn’t last, though.
Pretty soon, prepay customers wanted the same sophisticated services as their post-paid pals. This led to the growth of ‘real time’ rating. Basically, this means that when someone made a call, or accesses a data service, all of the calculations needed to flow immediately across all systems to decide what sort of customer they were and what they were doing, then calculate a price according to their particular contract, while delivering a good customer experience. Real time processing remains a massive challenge to the industry today.
Then, starting in the 00s with the slightly underwhelming WAP (Wireless Application Protocol), the delivery of data services to mobiles took complexity for billing into the stratosphere.
Let me give you an example. Suppose a customer downloaded the latest DJ Snake video on your smartphone (I have no idea who DJ Snake is. I’m just trying to sound hip and modern, and I’m not sure that Jethro Tull are still making videos).
Here are the calculations you, as telecoms service provider, might have to make from that simple act:
- You might need to generate a charge of 50p to the customer; or, the customer might have a subscription which you need to record the download against to make sure it’s still within a bundle.
- You might need to make a charge for 5mb of data; or, you might NOT need to make the charge so you need to look at their data bundle and ensure that it isn’t decremented from it.
- You may have to pay a fee to the media company hosting DJ Snake’s videos; and, you may have to make a royalty payment to the record company.
After you sort that out, then add to your considerations that the video may be shared to the customer’s friends, on different networks, using different devices, and with different contracts.
All from one simple download. And much of it in real time.
It’s quite complex to build a network and IT infrastructure that supports all of that. Especially when you factor in:
- The network elements delivering the content are continuously evolving.
- The IT systems supporting the transactions are being replaced.
- The telco companies themselves are being bought and sold (you’re never too far away from a merger or an acquisition in telecoms) and therefore, restructuring and migrating customers and data to new architectures.
- The Legal and Regulatory framework is constantly changing – pretty soon we’re going to need to work out what Brexit means for all of this when we are no longer aligned with our EU partners. The legal and regulatory implications of that, along with the changes to roaming,, are potentially huge.
Of course, while all that activity is happening, customers still get a simple, easily explained bill. Add to that the latest triple- and quad-play offers from suppliers where your billing system must pull data in from DIFFERENT networks (fixed, 3G, 4G, and WiFi), make calculations, apply cross-promotional discounts, and present it to the customer in such a way that they don’t resort to drink whilst trying to understand it!
The pace of change in what we want to send or receive over our networks is so fast that it is hard for me to predict exactly what our increasingly connected world will look like in FIVE years’ time, let alone twenty-five.
I imagine that fixed telephony will be a thing of the past, and that the way we access our networks may not be via handsets for the most part but instead by watches, glasses, intelligent wallpaper, or subcutaneous implants (these last two are happening as we speak).
So there will still be services, and they will still be sold, consumed, paid for, settled with third parties, assured, protected from fraud, and reported to revenue. While all that continues, someone, like me, will need to figure it all out.
And customers will still get, inevitably, one simple bill. <>
To mark Cartesian’s 25 years in the telecoms, media, and technology sector, we asked our consultants to reflect on industry topics and write about how they have changed over the last few decades. Click here to receive your copy of our anniversary eBook: 25 Years – A retrospective on innovation in the telecoms, media, and technology sector
[i] Yoon, SooIn, “The Rise of Mobile Phones: 20 years of global adoption”, Cartesian, June 2015.