38802983 Introduction to Telecom Billing

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Introduction To Telecom Billing Usage Events, Call Detail Records, and Bill Cycles Avi Ofrane, Harte, Lawrence Excerpted From: Introduction To Telecom Systems With Updated Information ALTHOS Publishing

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Transcript of 38802983 Introduction to Telecom Billing

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Introduction To Telecom BillingUsage Events, Call Detail Records, and Bill Cycles

Avi Ofrane, Harte, Lawrence

Excerpted From:

Introduction To Telecom Systems

With Updated InformationALTHOS Publishing

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About the Authors

Mr. Harte is the president of Althos, an expert informationprovider covering the communications industry. He hasover 29 years of technology analysis, development, imple-mentation, and business management experience. Mr.Harte has worked for leading companies includingEricsson/General Electric, Audiovox/Toshiba andWestinghouse and consulted for hundreds of other compa-nies. Mr. Harte continually researches, analyzes, and testsnew communication technologies, applications, and ser-

vices. He has authored over 30 books on telecommunications technologies ontopics including Wireless Mobile, Data Communications, VoIP, Broadband,Prepaid Services, and Communications Billing. Mr. Harte’s holds manydegrees and certificates include an Executive MBA from Wake ForestUniversity (1995) and a BSET from the University of the State of New York,(1990). Mr. Harte can be contacted at [email protected]

Avi Ofrane founded the Billing College in 1996, a trainingcompany addressing the converging market trends associ-ated with telecommunications Billing and Customer Care.The Billing College is a spin-off company of Mr. Ofrane'stechnology consulting company, Jupiter Data, Inc., estab-lished in 1990. Mr. Ofrane began his career in 1977 as ananalyst with the IBM Corporation and has since 1982 con-centrated exclusively on the telecommunications industry,in which he is now a recognized expert in Billing and

Customer Care. Throughout his extensive career, Mr. Ofrane has beeninvolved in all aspects of the industry, from strategic planning and execu-tive management to vendor evaluation and project implementation. Mr.Ofrane lectures extensively on Billing and Customer Care issues, strategies,methodologies, and practices. He is a frequently requested speaker at majorNorth American and European conferences. Mr. Ofrane is currentlyPresident and CEO of the Billing College, as well as a master instructor ofthe company's courses. Mr. Ofrane is the co-author of the book "TelecomMade Simple" and has written numerous articles for international tradepublications. Mr. Ofrane holds a Bachelor of Science in Computer Sciencefrom Pennsylvania State University.

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Table of Contents

BILLING AND CUSTOMER CARE . . . . . . . . . . . . . . . . . . . . . . 1

INTRODUCTION TO BILLING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Types of Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4Standard Billing Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4Real Time Billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Multilingual Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Multiple Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Inter-carrier Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

BILLING PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Event Sources and Tracking . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Mediation Devices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10Call Detail Records (CDRs) . . . . . . . . . . . . . . . . . . . . . . . . . . .11

MAJOR BILLING FUNCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13The Rating Engine: Processing the Usage . . . . . . . . . . . . . . . . .13The Invoicing Engine: Month-End Processing . . . . . . . . . . . . .15Clearinghouse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17Invoices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18Management Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19Invoicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19Processing Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19Posting to the Financial System . . . . . . . . . . . . . . . . . . . . . . . .20

CUSTOMER RELATIONSHIP MANAGEMENT (CRM) . . . . . . . . . . . . . . . 20Account Activation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21Account Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21

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BILLING SYSTEM COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Hardware and Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22Billing Cycles (Batching) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22Bill Printing and Mailing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22Call Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24

BILLING STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Exchange Message Record (EMR) . . . . . . . . . . . . . . . . . . . . . . .26Automatic Message Accounting (AMA) . . . . . . . . . . . . . . . . . . .26Carrier Inter-exchange Billing Exchange Record (CIBER) . . . .26Transferred Accounting Procedure (TAP) . . . . . . . . . . . . . . . . .27Network Data Management – Usage (NDM-U) . . . . . . . . . . . . .28Interim Standard 124 (IS-124) . . . . . . . . . . . . . . . . . . . . . . . . .28

THE FUTURE OF BILLING AND CUSTOMER CARE . . . . . . . . . . . . . . . 28Applications Service Providers (ASPs) . . . . . . . . . . . . . . . . . . .28Local Number Portability (LNP) . . . . . . . . . . . . . . . . . . . . . . . .29Customer Self-Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

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Billing and Customer Care

Billing and custom care systems convert the bits and bytes of digital infor-mation within a network into the money that will be received by the serviceprovider. To accomplish this, these systems provide account activation andtracking, service feature selection, selection of billing rates for specific calls,invoice creation, payment entry and management of communication withthe customer.

Billing and customer care systems are the link between end users and thetelecommunications service provider. Telecommunications service providersmanage and setup the networks to allow customers to communicate (provi-sioning), and bill end users for their use of the system. Customers who needtelecommunication services select carriers by evaluating service and equip-ment costs, reviewing the reliability of the network, and comparing how spe-cific services (features) match their communication needs. Because mostnetwork operations have access to systems with the same technology,Because most Telecommunications Service Providers offer essentially thesame types of services and network facilities, Billing & Customer Care arebecoming key differentiating factors and play a critical role in the cus-tomer’s carrier selection decision.

There are many different types of services to be supplied and billed. Theseinclude traditional voice and data communications, short messaging, fax,and information services. The billing process involves receiving UsageDetail Records (UDR) from various network elements, determining thebilling rates associated with each UDR, calculating its charge, aggregating

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the records periodically to produce invoices, sending invoices to the cus-tomer, and recording (“posting”) payments received from the customer.

Customer care systems, sometimes known as provisioning systems, are toolsthat assist the Customer Service Representatives (CSR) in their communi-cation with customers.

Billing system costs can “eat up” a substantial percentage of revenues col-lected. In addition to the initial acquisition cost of computers and software,operational costs tend to be very high. Of the service provider’s staff, typi-cally 20%-30% are directly or indirectly engaged in providing billing andcustomer care support.

There are many billing standards that have been developed for telecommu-nications networks. Because the services offered by different types of net-work operators (e.g. cable television compared to local telephone companies)are beginning to overlap, billing standards are also converging.

Future trends and challenges for billing systems include the proliferation ofnew types of services to support, telephone number portability that compli-cates account identification, and increased customer self care to reduce theburden (and cost) of billing systems.

Figure 1.1 shows an overview of a billing and customer care system. Thisdiagram shows the key steps for billing systems. First, the network recordsevents that contain usage information (for example, connection time) that isrelated to a specific call. Next, these events are combined and reformattedinto a single call detail record (CDR). Because these events only containnetwork usage information, the identity of the user must be matched (guid-ed) to the call detail record and the charging rate for the call must be deter-mined. After the total charge for the call is calculated using the chargingrate, the billing record is updated and is sent to a bill pool (list of ready-to-bill call records). Periodically, a bill is produced for the customer and aspayments are received, they are recorded (posted) to the customer’s account.

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Introduction to Billing

The control of a billing system is usually under the finance department.Billing systems are often viewed as accounts receivable as the billing systemassists in the collection (receipt) of money from customers. Billing systemsare also part of accounts payable (for inter-carrier settlements) as customersoften use services from other companies such as wireless roaming, long dis-tance, and call completion through other networks. The network operator isusually financially responsible for services provided to its customers byother networks regardless of whether or not the customer pays for the ser-vice.

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Figure 1.1, Billing and Customer Care SystemSource: The Billing College

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Types of Services

There types of services that a customer may use in a network include net-work access (basic information transfer), voice and data services over fixedline and mobile networks, Internet Protocol (IP) service (such as email), andcontent delivery (current traffic information for example). When the com-munication service involves system access through different networks, theevent is normally routed through a toll center and a toll charge may apply.A toll is any message telecommunications charge for services providedbeyond a local calling area.

Examples of system access services include Plain Old Telephone Service(POTS), Integrated Services Digital Network (ISDN), Digital SubscriberLine (DSL), and other data connectivity services that transfer informationbetween points. Information processing services include prepaid or postpaidphone card (Telecard), voice mail, fax (store and forward), and other servicesthat involve the processing of information passing between two or morepoints. Content delivery involves linking customers to sources of informa-tion content and transferring the content to the end customer. Examples ofcontent delivery include weather advisory services, stock quotes, and thedelivery of other sources of information that the customer requests.

Standard Billing Process

The typical billing process involves collecting usage information from net-work equipment (such as switches), formatting the usage information intorecords that a billing system can understand, transferring these records toa Rating Engine, that assigns charges to each record, receiving and record-ing payments from the customers, and creating invoices.

Figure 1.2 shows a standard Billing and Customer Care process. In this dia-gram, the customer interacts with Customer Care or works with an activa-tion agent to establish a new wireless account. The agent (CSR) enters thecustomer’s service preferences into the system, checks for credit worthiness,and provides the customer with a phone number so that the customer may

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make and receive calls through the mobile telephone network. As the cus-tomer makes calls, the connections made by the network (such as switches)create Usage Detail Records (UDR) of the activities. These UDRs includethe identification of the customer and other information relevant to thebilling system. The billing system also receives records from other carriers(such as a long distance service provider, or roaming partners). The billingsystem then reformats the UDRs into an internal layout that is proprietaryto the carrier, guides and updates the UDRs with correct customer and rat-ing information. After each UDR has been rated according to the customer’srate plan, it is stored in a “Bill Pool”. The Bill Pool is a data store contain-ing all UDRs that have been rated and are waiting for the month-end cyclebilling process to aggregate them and display them on a customer’s bill.

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Figure 1.2, Standard Billing ProcessSource: The Billing College

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The customer then sends his payment to the telecom service provider.Payments are recorded (posted) in the financial system. Customer’s billsare archived in “Billing History” files. These files are used heavily by vari-ous organizations within the enterprise: Customer Care (inquiries, adjust-ments, service order, etc.), Marketing (product analysis), Finance (revenuemanagement, revenue projections, profitability, etc.), Audit, and RevenueAssurance.

Real Time Billing

Real time billing involves the authenticating, authorizing, accounting, infor-mation gathering, rating, and posting either at the time of service requestor within a short time after the event has been initiated (this actually maybe several minutes in “near real time” billing). Real time billing is primar-ily used for prepaid services such as calling cards or prepaid wireless.

Many real-time billing systems use Remote Access Dial In User Server(RADIUS) to limit access to the system to registered and authorized cus-tomers. RADIUS is network protocol that operates on a network server(software program and database); it receives identification information froma potential user of a network service, authenticates the identity of the user,validates the authorization to use the requested service, and creates eventinformation for accounting purposes.

Real time billing may also provide for better customer care and ProvideAdvice Of Charge (AOC) information. AOC provides the ability of atelecommunications system to advise of the actual costs of telecommunica-tions event either prior to or after the occurrence of the event. For some sys-tems, (such as a mobile phone system) the AOC feature is delivered byShort Message Service (SMS).

Figure 1.3 shows a real time prepaid billing system. This diagram showsthat the customer initiates a call to a prepaid switching gateway. The gate-way gathers the account information by either prompting the user or byquerying the incoming call for an Id (e.g. prepaid wireless telephone num-

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ber). The gateway sends the account information (dialed digits and accountnumber) to the real time rating system. The real time rating system identi-fies the correct rate table (e.g. peak time or off peak time) and determinesthe account’s remaining balance. Using the rate information, the call desti-nation, and balance available, the real time rating system calculates themaximum allowable duration for the call. . This information is sent back tothe gateway and the gateway completes (connects) the call. While the call isin progress, the gateway maintains a timer so the caller cannot exceed themaximum amount of time. After the call is complete (either caller hangsup), the gateway sends a message to the real time rating system that con-taining the actual amount of time that was used. The real time rating sys-tem uses the time and rate information to calculate the actual charge forthe call. The system then updates the account balance (decreased by thecharge for the call).

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Figure 1.3, Real Time Billing

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Multilingual Support

Multilingual support involves providing invoices and customer care servicesin multiple languages. There is a growing trend to aggressively seek multi-national customers and it is becoming crucial for the billing system toinvoice customers in their chosen languages. Multilingual support may alsobe required by government regulations. Customer service representatives(CSRs) with multiple language skills should be available to communicatewith customers. Some of the key challenges associated with supportingmultiple languages include single-byte versus double-byte character setsupport, invoice design, equipment compatibility (printers, monitors, key-boards, etc.), and software drivers.

Multiple Currencies

Multiple currencies used in different countries can complicate the billingsystem as the billing and customer care system must be capable of record-ing and processing in units of multiple currencies. Multinational companieswill most likely process in multiple currencies. Some of the complications ofmultiple currencies include: rounding rules, significant digits, timing of rateconversion, payments made erroneously in a different currency, and rapidchanges in exchange rates.

Inter-carrier Settlements

Inter-carrier settlements are the sharing of revenue between carriers thatprovide services to each other’s customers. Because hundreds of carriersmay be providing services with each other, inter-carrier settlements areoften provided on a wholesale basis between network operators based onprearranged agreements between the carriers. In the United States, inter-carrier settlements are enabled through the use of carrier access billing sys-tem (CABS) or independent clearinghouses.

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Inter-carrier settlements are becoming more complicated with deregulation.To encourage fair competition, some governments are requiring existing(incumbent) telecommunication companies to unbundle their network ele-ments (UNE). Unbundling is the process of separating portions of atelecommunication network that are owned or operated by a serviceprovider. It is a common term used to describe the separation of standardtelephone equipment and services to allow competing telephone serviceproviders to gain fair access to parts of incumbent telephone company sys-tems. An example of an unbundled service is for the incumbent phone com-pany to lease access to the copper wire line that connects an end user to thelocal telephone company (Local Loop). The competing company may installhigh-speed data modems (such as ADSL) on the copper line to enhancing thevalue of the telecommunications service.

Billing Process

Billing systems have software and optional hardware components thatreceive UDRs from various network elements, validate them, rate them, andaggregate them into an invoice that is sent to the customer. Events may bereceived from many sources such as: a switch, a data router, a gateway, aclearinghouse, or an Application Service Provider (ASP); consequently theymust be converted into a standard format that is recognizable by the carri-er’s internal processes (including billing).

Billing and customer care systems may be developed and managed by inter-nal staff or contracted to other companies (outsourced). Companies thatprovide complete managed billing and/or customer care services (calledturnkey) to other companies are called service bureaus.

Event Sources and Tracking

Billing system events are measures of network usage. Events can be storedin the network device (Data Collector) for transfer at predetermined timeintervals, when a specific value has been reached (event trigger) or when thebilling system requests the information (called polling).

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Some common event sources include central office switches, routers, andapplication servers. Central office switches are devices that route calls fromone subscriber to another. They track the time one port is connected toanother port. Routers are intelligent switches that forward packets towardtheir destination based on their routing address (and possibly type of con-tent). Routers can track the amount of data that is routed between twoports over a period of time. Application servers are computers that processinformation at the request of a customer (called a client), and can track thebeginning (launching) and termination of an application.

Mediation Devices

A mediation device receives, processes, and reformats event information ina telecommunications network to a suitable format for one or more billingand customer care systems. This processed information is either continu-ously or periodically sent to the billing system. Mediation devices are com-monly used for billing and customer care systems as these devices can takenon-standard proprietary information from switches and other networkequipment and reformat them into messages billing systems can under-stand.

Switches usually record usage information (e.g., switch connection time) inBinary Coded Decimal (BCD) format and these record formats are often pro-prietary to the manufacturer of the switch. Each record may be variablelength and several events (e.g. switch points) may be recorded in the samesystem for a single call. There are at least 60 switch manufacturers andeach has several models of switches that may result in different billingrecord formats.

There are other network parts or devices that may be involved with con-necting a call or providing Value Added Services (VAS). These devices alsocan produce cal detail records and these records are in a different format.

Figure 1.4 shows a mediation system that takes call detail records from sev-eral different switches and reformats them into standard call detail recordsthat are sent to the billing system. This diagram shows that the mediationdevice is capable of receiving and decoding proprietary data formats from

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three different switch manufacturers. The mediation device converts theseformats into a standard Call Detail Record (CDR) format that can be usedby the billing system.

Call Detail Records (CDRs)

Billing information regarding specific calls is contained in Call DetailRecords. (CDRs) and includes: origination and destination address of a call(who), time of day the call was connected and duration of the call (when), thecall type and its details (what), the connection location(s) of the call (where),and the cause of event recording (why). As not all events are voice or data“calls”, the record generated by the network element is often referred to as

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Figure 1.4, Mediation System

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“Usage Detail Record (UDR)” and often contains non-telephony billing infor-mation such as: a downloaded movie, or IP content.

Figure 1.5 shows the basic structure of a call detail record. This diagramshows that a UDR contains a unique identification number, the originatorof the call, the called number, the start and end time of the call. This dia-gram also shows an additional charge for operator assistance and that aUDR dynamically grows as more relevant information becomes available.

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Figure 1.5, Usage Data Record (UDR)

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Major Billing Functions

Typically there are two major components to Billing systems: the RatingEngine (sometimes known as “front-end”) and the Invoicing Engine (some-times known as “back end”, “Cycle Billing”, or “Month-End Process”). TheRating Engine accepts UDRs from a service providers’ own switches or fromother providers or billing companies’ systems (sometimes called incollects,or in-roamers), checks the validity of billing records, matches billing recordsto customers in a database, and provides billing details to other systems(sometimes called outcollects, or out-roamers). The Rating Engine alsoguides billing records to specific customer accounts. Guiding uses theevent’s identification information such as the calling telephone number tomatch the billing record to a specific customer account.

The Invoicing Engine aggregates billing records for a specific period (billingcycle), calculates recurring charges (e.g. monthly charges) and total usagecharges (minutes or quantity of usage), and produces invoices.

The Rating Engine: Processing the Usage

As part of the billing system, the Rating Engine receives call details fromvarious sources (event records), reformats and edits these into UDRs,assigns a customer account to the UDR (guiding), calculates call charges foreach UDR, and gets the UDR ready for Invoicing.

In a traditional voice telephony environment, The Rating Engine processesUDRs in a batch mode (or at best in near real-time). There may be severalUDRs for each event. For example, a call may be originating at a localswitch, translated by an 800 number service, and routed through a long dis-tance switch. Billing and call processing can require a substantial amountof computer processing time because there may be many events for each call.

Each UDR is rated individually after having been assigned a rating band orcategory first. After a UDR has been rated and the actual charge for the callis calculated, it is stored in a “pool” of billing records that are ready to beinvoiced (called a bill pool). A bill pool is a group of call records that have

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been updated by the Rating Engine to include charging rate information.The bill pool usually contains records that are ready for the final stage of billprocessing.

Figure 1.6 shows the basic functions of the Rating Engine. This diagramshows how different event sources are received from various network ele-ments or from other companies that have provided services to your cus-tomers. These records are reformatted to a common UDR format and dupli-cate UDRs are eliminated. Identification information in each UDR is usedto guide (match) the record to an account in the customer database. Thecustomer’s information determines the rate plan to use in charge calcula-tion. The rating process uses rate tables, the customers selected rate plan,and other information (e.g. rate band, distance, time of day) to calculate theactual charge for each call. All of the information is added to the UDR andit is either placed in the bill pool (ready for billing), or it is sent to anothercompany to be billed if the customer identification is not part of this net-work’s customer database. If there are any problems as the UDR is beingprocessed, it is sent to Exception Investigation for further analysis.

Figure 1.6 The Rating EngineSource: The Billing College

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Billing systems contain many databases of information. Some of the keydatabases hold customer information, usage records, rate information, andbilling records that are ready to be invoiced. A customer database holdsunique identification information about the customer. This includes a cus-tomer account identification number, telephone number (may be the sameas the account number), authorized feature list, rate plan identifier (whichrate plan the customer subscribes to), service activation dates, and otherinformation specific to a customer or account. A rating database holds therate plan identifier codes and charges associated with each rate plan.

It may be necessary to divide the UDR into several components parts. Forexample, a call from a mobile telephone may be divided into airtime, land-line usage, and long distance usage.

UDRs are commonly processed using a single rating software module. Thismodule uses rate plan identification information found on the UDR (deter-mined after the guiding process) to match to rate tables that allows a perunit increment rate. Rate increments can vary based on the time of day(TOD), day of week (DOW), holidays, and other factors. After the call ratehas been determined, the Rating Engine places an initial value on the call.It may be necessary to re-rate the call based on information received afterinitial rating was calculated. Examples of this include: usage discounts(free minutes), toll free calls (called party pays), and calls billed using an oldrate table after a customer has selected a new rate plan.

The Invoicing Engine: Month-End Processing

The Invoicing Engine uses data from the updated bill pool and adds non-callrelated billing charges and financial adjustments. The billing system thenadds fixed recurring charges (such as monthly service fees and taxes),applies payments that have been received, produces invoices, and maintainsa history database.

Figure 1.7 shows the basic activities performed by the month-end process.This diagram shows that the first step in this process is the selection of cus-tomers whose cycle is to be billed during this “bill run”. For each customerto be billed, all usage having occurred before the cutoff date is then select-

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ed. The next step is for the usage to be aggregated according to the way inwhich it will appear on the customer’s bill; this step also includes the calcu-lation of any volume discounts to which the customer has subscribed. Fixedcharges – both recurring and non-recurring – are then calculated accordingto the product information retrieved from the product portfolio database.Taxes and surcharges are then calculated (Federal, State, Local, FCC,Universal Service Fund, etc.) and the financial chart of accounts is updatedwith the debits and credits. Finally marketing and other messages areinserted into the customer’s invoice, which is then sent to a production facil-ity (print shop, CD-ROM duplication, Internet website, etc.) for delivery tothe customer. The invoice is then archived in the Billing History database,and various reports are generated, such as financial reports, reconciliationreports, analysis reports, etc.

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Figure 1.7: Back End – The Invoicing EngineSource: The Billing College

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Clearinghouse

A clearinghouse is a company or association that transfers billing recordsand/or performs financial clearing functions between carriers that allowtheir customers to use each other’s networks. The clearinghouse receives,validates and accounts for telephone bills for several telephone serviceproviders. Clearinghouses are particularly important for internationalbilling because they convert different data record formats that may be usedby some service providers and convert for the currency exchange rate.

Clearinghouses provide a variety of services including processing propri-etary records (e.g. switch records) into formats understandable by the mem-ber carriers’ billing systems, validate charges from carriers with intersys-tem agreements, and extract unauthorized or un-billable billing records.Clearinghouses transfer messages in a standard format such as ExchangeMessage Record (EMR), Cellular Inter-Carrier Billing Exchange Roamer(CIBER), or Transferred Account Process (TAP) format. The EMR format isoften used for billing records in traditional wired telecom networks and theCIBER and TAP formats are used for wireless networks. The records maybe exchanged by magnetic tape or by other medium such as electronic trans-fer or CD ROM.

Clearinghouses receive billing records from companies (outcollects - some-times called in-roamers) and submit billing records to companies (incollects- sometimes called out-roamers). Outcollects are billing records that are sentto other systems to collect for services provided to visiting customers.Incollects are billing records that are received from other systems for ser-vices provided to their customers that have used the services of other net-works.

Inter-carrier billing systems must be capable of handling billing systemerrors. There are many events per call and the possibility exists for dupli-cate records or missing details in the billing records. Charges or recordsmay be received for customers that do not exist in the local system or theinter-services (or roaming) agreement between companies may not be valid.Charges or records may be received from other companies (incollects) thathave crammed or slammed bills. Cramming is the erroneous or fraudulent

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addition of charges for services that were not agreed to by the end customer.Slamming is the unauthorized transfer of customer’s preferred serviceprovider to a different service provider. When errors or omissions aredetected, individual UDRs or entire batches of billing records may beflagged for return to the sender and they may be tagged for further investi-gation.

Invoices

Invoices contain the details of how much the customer should pay to the car-rier, when the amount is due, and other information regarding the bill.Invoices usually provide a customer with detailed information regarding thesource of the charge (date and location), reasons for the charge (service pro-vided), and the amount of the charge. Figure 1.8 shows a sample invoice.

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Figure 1.8, Sample Invoice

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Management Reporting

Management reports provide information to finance, sales, and operationson the performance of the system. Reports can identify problems such as,silent churn, potential new services, and network congestion. Churn is theprocess of customers disconnecting from one telecommunications serviceprovider. Churn can be a natural process of customer geographic relocationor to may be the result of customers selecting a new service provider in theirlocal area. Silent churn is the process of customers disconnecting from onetelecommunications service provider due to a competitor’s influence. Silentchurn is usually the result of inadequate customer service or lack of com-petitive rate plans. Customers that are transitioning to competitor’s serviceswill show rapid declines in usage of service.

Management reporting can also be used to discover new services. By review-ing call patterns, churn and silent churn patterns, and customer feedback,managers can determine which new services may be good candidates fortheir system. UDRs and network activity can also indicate areas of networkcongestion and corrective measures (rerouting or adding resources) can beaccomplished to overcome the challenge.

Invoicing

Invoicing is the process of gathering items to be billed (rated UDRs) thathave occurred over an invoice period, adding additional charges and creditsthat are not related to specific calls, and preparing the information (format-ting) so it may be presented to the customer in a clear way. Invoices may bedelivered by mail or in other formats such as CD-ROM or email.

Processing Payments

Processing payments involves collecting assets to settle the customer’sinvoices. The typical forms of payments that are received from customersinclude checks, cash, wire transfer, credits, and credit cards. However, otherpayments or credits may be applied to the customers account.

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Recording the payment to the customer’s account is called “posting”. Postingusually involves using a payment coupon that has an account number on itand logging the received amount of money to the account. Ideally, the cus-tomer has provided the payment coupon with the correct amount. In somecases however, the customer might not have included the payment couponor might have paid a different amount than indicated. In this case, postingof payments may result in errors such as posting to the wrong account orapplying payment new invoices instead of old invoices.

Posting to the Financial System

The billing system records financial details (receivables) for the carrier.Periodically, summary information is transferred into the General Ledger(G/L) of the carrier’s accounting system. This summary posting groups dif-ferent types of billing charges into summary totals to be posted to differentfinancial accounts. These types of accounts include receivables or expenses,and each financial account is assigned a unique number (in the financialchart of accounts). For example, payments received by credit card are usu-ally categorized differently than payments received by cash and these totalswill be recorded in accounts with different account numbers.

Customer Relationship Management (CRM)

Customer Relationship Management (CRM), of which Customer Care maybe a sub-system, is the process of communicating with the customer regard-ing their establishing accounts, service feature activation, handling cus-tomer inquiries adjusting accounts for disputes (account management),technical support, selling additional products and services to the customer(post sales support), and collection services.

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Account Activation

Account activation is the acquiring and entering information that isrequired for the system to provide services to a customer. The account acti-vation may involve many steps prior to the entry of information to the sys-tem. Account activation steps may require the customer to complete anapplication for service, credit check, and copying of documents that validatethe identity of a new customer (to prevent fraud). Account activation alsoinvolves assigning the customer to specific rate plans for service charges.

Account activation involves informing the network of customer accountinformation and what services they are authorized to use. This is called pro-visioning of the network.

Account Management

Account management involves communication with the customer for salesrelated and collections activities. Typically, all communication with the cus-tomer is recorded in various formats such as call records and voice record-ing.

Account management also involves creating records to track technical prob-lems the customer may be experiencing with the service. These records oftrouble (often called “trouble tickets”) are routed to technical support. Thesetrouble tickets remain open so managers can review progress until the prob-lem is solved.

Account managers may also receive inquiries or billing complaints thatrequire message investigation. Message investigation reviews billingrecords to resolve customer disputes. In some cases, account managers maybe used to assist in the collection of outstanding invoices.

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Billing System Costs

Billing system costs include the initial hardware, software costs of the sys-tem along with the operational costs such as invoice processing, bill print-ing and mailing, intermediary clearing house settlement companies, cus-tomer care (call centers), and collection services.

Hardware and Software

The hardware usually includes high performance computers that operateproprietary software. Due to the complexity of hardware and softwarebilling systems, continuous training is required in order to ensure qualityservices to the customers and to provide revenue assurance.

Billing Cycles (Batching)

If a company has many customers, they are typically divided into cycles (or“billing cycles.”) The billing cycles are different for groups of customers.This allows the billing system to bill only a portion of the customers at atime.

Bill Printing and Mailing

In most cases, invoice records are sent to a bill printing facility or they maybe sent by email or printed by the customer when the payment is madeonline. Bills that are sent to the printer and mailing house usually costbetween $1-$3 per bill. Sending bills by email helps to reduce the cost ofproviding the customers with bills and receipts.

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Call Center

A call center is a place where communication occurs between a carrier andits customers. Call centers assist customers with requests for new serviceactivation and help with product features and services. A call center usual-ly has many stations for call center agents that communicate with cus-tomers. When call agents assist customers, they are typically called cus-tomer service representatives (CSRs).

Call centers use telephone systems that usually include sophisticatedAutomatic Call Distribution (ACD) systems and Computer TelephonyIntegration (CTI) systems. ACD systems route the incoming calls to the cor-rect (qualified) Customer Service Representative (CSR). CTI systems linkthe telephone calls to the accounting databases to allow the CSR to see theaccount history (usually producing a “screen-pop” of information).

Call center telephone systems can cost over $3,000 per CSR station. Theaverage telecommunications service provider has 1-2 CSRs for every 10,000customers. This results in an average customer care call costing $7-$10 percall.

Figure 1.9 shows a typical call center. This diagram shows that calls maybe received or originated from the call center. The customer traditionallycommunicates with the call center by telephone. When a call is received bya call center, the user is typically provides with a list of options by an auto-mated interactive voice response (IVR) unit. As the user selects from the listof options, an ACD system routes the call to a CSR station that is qualifiedto assist the customer (e.g. sales agent or technician). When the CSR agentanswers the call, some of the customer’s account information may becomeavailable on the CSR’s computer screen (“screen pop”). The CSR will com-municate with the customers and should make notes in the customer’saccount regarding the activity that progressed.

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Collections

Collections are activities that a service provider performs to receive moneyfrom their customers. Ideally, all customers will receive their bills and paypromptly. Unfortunately, not all customers pay their bills and serviceproviders must have a progressive collection process in the event customersdo not pay their bill.

When customers are first added to a system, they are “scored” on the prob-ability that they will pay their bills. Using information on their applicationand reviewing the credit history as provided by an independent creditreporting agency accomplishes this.

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Figure 1.9, Call Center

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The collection process for delinquent customers usually starts by sending areminder messages to the customer be mail or recorded audio message. Ifinitial attempts to collect are unsuccessful, more aggressive collection mea-sures are taken, such as: restricted calling, service disconnection and send-ing or selling the uncollected invoice to a collection service.

Some carriers automatically re-route all calls made by a delinquent cus-tomer to a collections operator. This is called “Hot-Lining”. Hot-Lining istypically used when a telephone is first sold or activated to allow activationafter the customer has provided the information to register for service orwhen the customer has not paid their bill.

If all attempts to collect from a customer have failed, a service provider maywrite off the uncollected revenue as bad debt, retain a collection agency orsell the uncollected invoice(s) to a collection service. If the account is writ-ten off as bad debt, the customer’s information is usually placed in a nega-tive file to avoid reactivation and their poor payment history is reported toa credit reporting agency. Various collection companies (collection agencies)offer collection services that work on a percentage of collected revenue.Some collection companies will pay for uncollected invoices. When uncol-lected invoices are sold to collection services, the service provider is usuallyprohibited from working with the customer in the future regarding paymenton the account.

Billing Standards

Billing standards define the measurements, record format and the methodsof transfer for billing related information within a network. New servicesare being offered by network operation because of deregulation of thetelecommunications industries around the world. As a result, billing stan-dards are continually being revised and they are converging. Because com-panies can use different billing standards or different revisions of billingstandards, clearinghouses often provide translation services between differ-ent billing standard formats.

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Exchange Message Record (EMR)

Exchange Message Record (EMR) is a standard format for the exchange ofmessages between telecommunications systems. The EMR format is oftenused for billing records. The records may be exchanged by magnetic tape orby other medium such as electronic transfer or CD ROM.

Automatic Message Accounting (AMA)

Automatic Message Accounting (AMA) is a standard record gathering andbilling format that is used primarily by local telephone companies to processbilling records and exchange records between systems. The AMA formatwas created by BellCore and is now managed by Telcordia.

Carrier Inter-exchange Billing Exchange Record (CIBER)

Carrier Inter-Exchange Billing Exchange Record (CIBER) is a billing stan-dard designed to promote inter-carrier roaming between cellular and otherwireless telephone systems. The CIBER format is developed and main-tained by CiberNet. The Cellular Telecommunications Industry Association(CTIA) owns CiberNet. Figure 1.10 shows some of the information (fields)contained in a CIBER record.

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Transferred Accounting Procedure (TAP)

Transferred Accounting Procedure (TAP) is a standard billing format that isprimarily used for Global System for Mobile communications (GSM) cellularand Personal Communications Systems (PCS). There are currently multipleversions of TAP: TAP II, TAP II+, NAIG TAP II, and TAP 3. Each succes-sive version of TAP provides for enhanced features.

Due to the global nature of 3G wireless and GSM, the TAP billing standardprovides solutions for multi-lingual and multiple exchange rate issues.TAP3 was released in 2000 as a significant revision of TAP2. TAP3 haschanged from the fixed record size used in TAP2 to variable record size andTAP3 offers billing information for many new types of services such asbilling for short messaging and other information services. The GSM asso-ciation (www.GSMmobile.com) manages the TAP standard.

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Figure 1.10, Ciber Billing Record StructureSource: The Billing College

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Network Data Management – Usage (NDM-U)

The network data management – usage (NDM-U) is a standard messagingformat that allows the recording of usage in a communication network, pri-marily in Internet networks. The NMD-U defines an Internet ProtocolDetail Record (IPDR) as the standard measurement record.

The IPDR structure is very flexible and new billing attributes (fields) arebeing added because Internet services are now offered in almost all commu-nications systems. The NMD-U standard is managed by the IPDR organi-zation (www.IPDR.org.)

Interim Standard 124 (IS-124)

The Interim Standard 124 (IS-124) standard allows for the real time trans-mission of billing records between different systems, primarily betweenwireless systems in the Americas. IS-124 messaging is independent ofunderlying technology and can be sent over X.25 or SS7 signaling links.

The development of standards is primarily led by CiberNet, a division of thecellular Telecommunications Industry Association (CTIA).

The Future of Billing and Customer Care

Good billing and customer care systems are a key part of the success of atelecommunications service provider. The key issues for future billing andcustomer care systems include offering network services, the ability to cap-ture customers from the competitor, and cost effective management of cus-tomers.

Applications Service Providers (ASPs)

An Application Service Provider (ASP) is a company that provides an enduser with privileges to use applications hosted on the ASP’s servers. An

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ASP company owns or leases computer hardware and software systems thatallow one or more users to access applications and information services onits server. ASPs usually have use or have relationships with telecommuni-cations service providers to offers application services to their (the Telcos’)customers. Examples of applications services include weather reporting,stock quotes, and Internet telephony services.

Local Number Portability (LNP)

Local Number Portability provides the ability for customers to keep theirtelephone number independent of their local service provider, services sub-scribed to, and geographic location. This creates a variety of challenges forbilling and customer care, such as the ability to determine whether the ter-minating number is “ported” and calculating distance-based rates.

There are three key parts to number portability, local carrier portability,service portability, and geographic portability. Local carrier portabilityallows the customer to switch from one local carrier to a competing local car-rier and keep the same telephone number. Service number portabilityallows customers to keep their phone numbers when they change type ofservice. For example, a customer could transfer his wired home telephoneservice to a mobile wireless telephone service provider who is located in hislocal area. Geographic number portability allows the customers to taketheir telephone numbers (area code and local exchange number) with themregardless of their location within the country.

To offer number portability, two numbers are required. The first number, aLocation Routing Number (LRN), identifies the new location, new servingswitch, and type of service of the customer. The second number is the “old”telephone that the customer is known by to the outside world. When a “port-ed” customer’s telephone number is dialed, the customer’s LRN is used todetermine the location of the switch that will terminate the call.Local number portability complicates the billing system’s ability to identifythe customer and apply location-sensitive rates.

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Customer Self-Care

Customer self care is the process of a allowing the customer to review, acti-vate, or disable services without the direct assistance of a Customer ServiceRepresentative (CSR). Customer self care can be as simple as providingaccount billing information to the customer by telephone through the use ofan interactive voice response (IVR) system to providing interactive serviceactivation menus on an Internet web site.

Although customer self care can increase customer satisfaction (although itvery frequently achieves the opposite!), it is primarily implemented toreduce the cost of customer care services. Some of the challenges of cus-tomer self-care include the non-real time nature of billing systems (accountstatus), limited customer knowledge of key features, services, and availablerate plans.

Figure 1.11 shows that a customer self-care system can be used to reviewproduct or service options, check billing records, and change customer fea-ture options (called “provisioning”). This diagram shows that the customercan contact the billing and customer care system via a gateway. The gate-way may contain Internet web access (for graphic displays) or interactivevoice response (IVR) systems to allow the customer to select their account,receive billing and customer care information, and possibly change featuresand options.

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Figure 1.11, Customer Self Care