An order from the CRTC yesterday caught my eye. There were two interesting issues that arise – the ability to adjust rates retroactively and the challenges of billing and customer information systems.
The situation was that Bell Aliant had planned to raise the price of its Hospital Patient Telephone Service last July 1. Due to an oversight, the changes didn’t get put into its billing system and to fix it, the costs of modifying the systems exceed the revenues that would be generated. So, Bell Aliant asked the CRTC to effectively reverse the price increase retroactively.
Yesterday’s Order was an interim rate decision; the CRTC has usually found that it cannot adjust rates retroactively, where the tariff had already received “final” approval. The CRTC will deal with the issues associated with the final ratification later – whether the rates can be adjusted retroactively; whether the old price needs to pass a price floor test, etc. While it sorts through the legal issues, the interim rate order stops the amount from continuing to accumulate.
The other interesting issue is that Bell Aliant apparently cannot easily adjust the prices on a single rate element. Does this indicate that there may be a significant capital requirement in the future to replace legacy billing systems?
We have looked at operational and billing support systems in past sessions at The Canadian Telecom Summit. This year, we look at the issues from the perspective of Customer Experience Management – leveraging systems to increase customer loyalty and service provider revenues. That session, featuring executives from Sybase, Microsoft, IBM, Redknee and CGI, will be taking place on June 7 at The 2010 Canadian Telecom Summit.
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The telcos of the world have the worst billing systems. While newer services like data and wireless are generally on modern platforms (needed to support things like prepaid, add-ons, differentiating between data usage for mobile applications, etc.), landline services are generally on older platforms. They just don’t appear to be because the data is fed into a more modern aggregator that produces the merged bill. And the services they deliver are simple.. fixed charges for features and toll charges.
These legacy systems would probably be very costly to replace and offer limited added value. Changes to them require knowledge of older software and languages, like COBOL, CICS/MVS, in-house apps or end-of-life products from former Bellcore. Carriers have already created non-legacy systems to feed them data (web based order front-end & toll usage) and extract data (The monthly bill information sent to aggregator). Replacing the part in the middle and all of its interfaces that do the work (switch programming, field work orders, etc) doesn’t add much value. Cheaper to keep it on life support than to replace it. And the moderns billing platforms are still extremely expensive to purchase and implement, not to mention modify each time you make a rate plan change. Add in the licenses for the OS/Database/billing software, then client licenses for users and you see why keeping an old Unix or mainframe application makes sense. Only when all the old class 5 pots switches and other similar legacy services are gone will these systems die.