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Real-time services make their debut

Wed, 02/01/2012 - 3:04am
Chad Dunavant, Vice President of Product Management at CSG International

It's a real market opportunity for cable operators.

Consumers can’t get enough of high-speed data, voice and the ever-growing inventory of video content available in the marketplace today. Based on growth projections for bandwidth usage in the United States, operators have a significant opportunity ahead. Cisco Systems recently estimated that the average user in the U.S. currently consumes about 12 GB of bandwidth per month (equal to about 32 to 40 DVDs).

Cisco expects bandwidth usage to rise over the next few years to 15 terabits per month – the equivalent of 3,750 DVDs per user per month. This dramatic shift in the way consumers use voice, video and data services is creating new opportunities for growth.

This increase in bandwidth consumption, coupled with every device being connected, eventually leads to a world where all networks converge over a single IP service delivery system. That shift will dramatically impact how services are ordered, delivered and billed across all providers, including broadband.

Figure 1 - New face for the back office ...

In response, cable operators are launching (or are preparing to launch) a myriad of services – everything from Wi-Fi networks to TV Everywhere – leveraging their broadband networks. But at every turn, competitors threaten to erode market share by luring subscribers away with new wireless quad-play offers, over-the-top (OTT) content and various other non-traditional service offerings.

In light of that, providers need to think about:

• What new services will continue to add value to subscribers and increase revenue?

• How do we attract and support new customers who may prefer a la carte purchases or prepaid options over traditional models?

• How do we deliver a flawless customer experience where services are delivered at the network edge and in the cloud – and customer interactions are, too?

• How does the bundle evolve to differentiate offerings from OTT content providers?

• What new enterprise applications will be needed to support real-time services?

• In addition, how does IP-based service delivery impact service activation? It threatens to invert the current process. Today, when consumers purchase a television, they call a cable provider and set up an installation. Next, a technician shows up at the door with a box in hand, installs everything and calls the call center. The network operator activates the equipment, and the TV service starts working.

In this process, the cable plant is being controlled by the order and provisioning of the consumer’s equipment (order >> billing >> consumer). But this model is set to be flipped on its head.

Consumers will literally purchase a television in a store, go to their home and plug it directly into the network (wireless or tethered). What happens then? Consumers will walk through an onscreen ordering menu where they can set up their television experience. In this model, the role of the technician changes, the role of the call center changes, and the role of the billing and ordering system changes (customer >> order >> billing). Sound familiar? It is. That is how you use consumer electronics today!

All of these scenarios need to be addressed while keeping an eye toward monetization of services, which has driven the need for real-time services. From real-time rating, charging and policy management to product catalog and offer management tools that can enable dynamic pricing and bundling, cable providers need to understand how such services can capitalize on growth without jeopardizing revenue.

Figure 2 - Empower call center agents ...

REAL-TIME CHARGING/POLICY MANAGEMENT
In this new era, one-size-fits-all service offerings will be a thing of the past. Consumers will come to expect plans tailored to their specific usage and preferences and to pay accordingly. As a result, broadband operators will need to create a whole host of new tiered bandwidth, high-speed data and content offerings to accommodate a wide variance in customer usage patterns and preferences.

In other words, how does an operator support the complex needs of enterprise customers who want to move to a cloud model while maintaining a competitive offering to support the emerging needs of residential consumers who want video portability?

Providers must be able to support new and more complicated ways of packaging, promoting and rating their services in order to deliver ARPU based on usage, bandwidth speeds and quality of service. This will require applications that can monitor, rate and charge for usage and support the consumer – all in real time. Real-time charging and policy management capabilities will play a key role in supporting operators in this new era by monitoring usage as it occurs and triggering certain actions based on that usage. The differentiator will be how these get packaged and promoted to the end user.

As part of this next-generation, real-time world, transactions are complex, and simplistic network-based approaches to charging and subscriber control are no longer feasible. This means that business support systems (BSS) must support both the control characteristics associated with policy management and the revenue generation provided by sophisticated online charging.

When charging and policy functions are working together, providers can maximize profits with the full monetization and management of bandwidth resources, as well as provide an enhanced consumer experience. This empowers consumers to control their own services and their own experiences, masking the complexity of policy and charging.

Figure 3 - Customer self-care ...

PRODUCT CATALOG/OFFER MANAGEMENT TOOLS
As consumers increasingly expect seamless service delivery across all of their devices, they will also expect seamless quality of service and customer support. In addition to deploying more sophisticated rating, charging and policy management technologies to support hybrid usage across multiple devices, operators will also need to support completely new forms of payment types, including prepaid.

Future growth will come from: 1) increased revenues through value-added services; and 2) building customer loyalty by giving subscribers what they want, when they want it. For example, the industry is already seeing the introduction of tiered data plans based on bandwidth speeds, as well as a la carte pricing and other innovative offerings that help combat the growing list of OTT providers.

As operators develop such sophisticated plans, the next natural step is to effectively target and market those offerings to the right customer at the right time. Comprehensive product catalog and offer management solutions will be a critical component to directly delivering offers to the customer’s end device. They will also help marketers more precisely identify which tiered service is best for which customer and help them upsell customers appropriately.

Ideally, offer management enables call center agents to conduct targeted selling to customers, helping make the overall sales process more effective. It presents only the offers that are relevant and takes the complexity and guesswork out of the hands of the call center agents. This lowers fallout, increases sales effectiveness and improves the customer experience. As a result, call center agents are able to make more targeted offers and tailor pitches based on customer profile attributes (demographics, purchase patterns, credit history, etc.).

Underpinning this process is a product catalog, acting as the centralized source that brings together all of the various product and service systems and databases. This master data source reduces the time needed to configure products, implement price changes and create bundles. A catalog capability is particularly critical to managing price variability across a la carte consumption plans, as well as to supporting new sales channels outside of the call center.

With highly configurable product catalog and offer management systems in place, consumers might be interested in 40, 50, or even 100 new service offers a year, not counting the potentially hundreds of pricing plan options that could come out as part of other promotions and offerings. Cable providers are further empowered to deliver a more personalized approach to their customers to bolster loyalty and market share by extending affinity plans and delivering volume discounts and cross-product promotions, such as free pay-per-view movie downloads.

When catalog and offer functions can be tied to billing, customer care and realtime network events, the operator begins to take the approach one step further to deploy a customer interaction management strategy that also personalizes and automates proactive communication with each customer as real-time events take place. This strategy makes real-time customer interaction a reality. For example, a customer has a 30 GB data plan in their home and has streamed movies for most of the month, and the customer is now 1 GB away from the plan limit. Through the tie between product catalog, offer management and real-time network information, a message can be sent to the customer – based on his communication preference – that notifies him of his usage cap and contains an offer to buy additional GB or upgrade to a new comprehensive usage plan.

CONVERGENT BILLING MODELS
A real-time rating, charging and policy management framework is a critical step toward launching these new and in-demand services. Equally important is the ability to support convergent billing models across all customer types. Infrastructure investments needn’t be extensive, and implementations needn’t be time-consuming or disruptive for broadband providers to initiate this next generation of services.

A key consideration when thinking about what is needed to support realtime transactions is the ability to offer convergent billing models via a blend of pre- and postpaid services. This could include scenarios such as spending caps for the kids on broadband video, time-based usage limits so that kids are not online after hours and prepaid data plans that allow extension of seldom-used services like wireless. For example, a consumer may want to extend broadband to WiMAX, but only when leaving the house on business. If business trips are frequently scheduled at the last minute, a capped prepaid plan may be a good extension to an existing postpaid plan.

The debut of real-time services will change the way in which broadband providers interact with their customers. With change often comes significant reward and the opportunity to take part in an exciting new era in the industry.

E-Mail: chad.dunavant@csgi.com

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