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Convergent billing systems are the way forward for mobile operators
For any business, balancing the need to reduce costs, retain customers and accelerate average revenue per user (ARPU) represents a challenge. This conundrum is particularly acute for telecom operators. Decreasing margins from traditional voicebased services, coupled with the necessity of growing broadband and next-generation service offerings, is placing considerable demands on already-stretched finances and technical capabilities.
Yet mobile operators are sitting on a potential goldmine courtesy of the vast numbers of pre-paid subscribers throughout the world. An estimated 50 per cent of the world's mobile consumers currently select pre-paid, a figure that is projected by Ovum, a consultancy firm, to increase further by 2008 to reach 1.3 billion. In Europe, the number of pre-paid users is even more pronounced, accounting for around two-thirds of all mobile subscribers.
The challenge for operators, therefore, is to harness the revenue potential of the prepaid users as well as the post-paid ones. With high rates of mobile penetration across Europe, any move towards saturation needs to be offset by the rapid development of payment-agnostic next-generation offerings, coupled with a focus on optimising the value of existing customers. In order to achieve this, 'stovepipe' legacy environments must give way to convergent charging systems that can accommodate both pre-paid and post-paid accounts and offer the flexibility to combine a variety of charging methods.
Strategy realignment
While challenging market climates have naturally focused operators' attention on achieving cost reductions and efficiencies, more operators are now looking to capitalise on growth opportunities. In broad terms, mobile operators are looking to drive growth via a two-pronged strategy. First they need to define, package and market services that are cleverly differentiated from those of competitors. secondly, they are looking to increase average margin per user (AMPU) across the entire subscriber base and optimise revenues over the longterm. Both strands will require the ability to segment the customer base, identify the highest margin users and apply sophisticated targeting of services.
To a casual observer, such a strategy might appear simple. After all, isn't this precisely what operators have been doing for years? The answer is, of course, 'in part'. In the formative years of mobile communications when technology was simple, voice was king, competition...