Billing systems fail telcos: analyst

IT has failed to provide appropriate billing solutions for the telecommunications sector thereby impacting on their ability to look after customers, according to telecommunications analyst Paul Budde.

With most telcos operating with proprietary billing systems, Budde said the solutions have proved "very inflexible" for carrier companies that can have hundreds of thousands of customers.

"The IT system is not catering for the flexibility that is needed [within the industry], for example the range of charging options provided by carriers and the fact that people tend to change packages quite frequently."

However, Bob Berewington, group manager analysis and special projects for telecommunications consultants NUS International, said IT can't make billing systems too flexible or they will not work.

"Telco billing is an horrendous job, especially with all the different charging options each carrier has. I have seen raw billing data from telcos and I am amazed that a bill comes out."

It was, according to Budde, the "appalling" billing system of junior telco One.Tel, which contributed to the demise of the company.

Geoff Johnson, research area director, enterprise network strategies for Gartner Asia Pacific, agreed that One.Tel's billing systems had "classic systems" of failure. "Everything revolves around the billing system. One.Tel's billing, customer services and operations support system did not operate effectively and did not handle the growth of the company."

Berewington confirmed that there has been "hearsay" around the industry that One.Tel had "problems" with its billing system.

One.Tel was unable to be contacted to comment on the billing system claims.

Budde said looking at One.Tel's original business plan as a virtual mobile network operator, a reseller of telecommunication services, meant its core business should have been looking after its customers and its in-house billing system.

"Over the last year One.Tel produced one of the highest levels of customer complaints in the country."

One.Tel recorded 4221 customer complaints according to the Telecommunications Performance Report 1999-00. But the Australian Communications Authority said in the report that it assumes the number of complaints to be "considerably greater" than this figure due to poor data collection on One.Tel's part.

"Its customer service collapsed under the weight of all the complaints, people couldn't get through to the company and the only way out was to provide more and deeper discounts to keep the customers happy," Budde said.

However, Peter Lemon, senior analyst, Internet services and communication for IDC, said instead of looking after core concerns the company got "too ambitious" and bought an "expensive" GSM network from Lucent Technologies.

"It wanted to grow the value of the customer up and keep the value in-house."

But the move into networks meant that the telco became a "totally different company", according to Budde.

Like most other telcos in the Australian marketplace, it tried to copy the Telstra model and get as many people into its network as possible. "Telcos have to learn to specialise. Businesses don't operate this way, they specialise," Budde said.

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