1. Mr. Ran Mitra Vice President Intelligent Networks Division New Ways to Generate Profit in a Real-Time Billing Environment

2. 2 Context of this presentation  Comverse is recognized by analysts as one of the major providers of prepaid service worldwide  Systems are deployed in all network types, with all major switch types, and using all major IN standards  Rapid evolution to a real-time billing platform, offering real-time billing for all services to all subscribers  A pioneer in the delivery of converged billing solutions around the world

3. 3 Goals of this presentation  To assess the current state of billing for services  Today’s bipolar approach  The trend towards convergence  To identify new ways to generate profit through the use of real-time billing of all services to all subscribers  Reduced costs  Increased revenues  Uniquely real-time benefits  To address specific cost and risk issues in today’s converging market  Impact of roaming  Impact of data services

4. 4 A Bipolar Billing Market  Traditional post-paid systems  Offer sophisticated billing options  Maintain close relationship with end-users  Require much effort and time to make changes  Traditional prepaid systems  Offer real-time usage and credit control  Require little effort and time to make changes  Details of end-users are often missing

5. 5 The Trend Towards Convergence  Goals of Convergence  Combining the best of prepaid and post-paid  Unified billing systems and processes  Consistent Customer Care  Reduce cost of CC, provisioning, etc..  Consistent marketing programs  Ways to achieve Convergence  Limited integration, especially Customer Care  Speed up the billing process for some services/ subscribers to approximate real time  Change the overall billing paradigm – a real time billing system

6. 6 Comverse’ View of Convergence  Real-time Billing of All Services to All Subscribers  Authorize all service requests in real-time  Rate and charge for services in real-time  Monitor usage and enforce a credit limit in real-time  Collect and distribute account usage information in real-time  Off-line Billing Support for All Subscribers  Unified and consistent Customer Care  Comprehensive Customer Relationship Management  Traditional billing cycle and payment collection  Reconciliation of charges between operators and content providers Working together….

7. 7 Changing Billing Paradigms PrepaidPostpaid Real-Time Non Real-Time

8. 8 Improving Profit – Cost Savings  Losses due to bad debt  Every subscriber is a credit risk  Losses are exacerbated by roaming and data services  Consider the banking and credit card industries  Losses due to revenue leakage  Not every service that is delivered is billed to the subscriber  “More revenue is lost each year as a result of revenue leakage than is spent annually on billing system.”  Costs due to duplicate systems and processes  Two systems and processes  Two marketing programs  Two plans for introducing new services Address the following….

9. 9 Time Service Value and Complexity Basic Voice Services Value-Added Voice M-Commerce Greater Risk: Credit Loss Leakage Value-Added Data Services Increased Risk over Time

10. 10 For emerging data services and the associated higher ARPU: Managing Credit Risk Debit card: individual can spend only the balance in their bank account Credit card: can spend up to a predefined limit Both cards can be used to purchase all goods & services Consider an analogy: Prepaid account = debit card Post-paid account = credit card Real-time authorization and credit limits must apply to both types of account

11. 11 Switch Billing System Incomplete customer records Records too late Fraud Debt write-off Bill generation & collection Delayed payment Bill Collection Corrupted CDRS Failure to create records Records lost Sent to error file Reducing the Extent of Leakage Real Potential Savings: Reducing leakage (2%) Reducing bad debt (2%) Automated billing (1%) Real-time Billing

12. 12 Improving Profit – Increased Revenue  Increased billing flexibility  Introducing new services without excessive time and cost  Changing service packages dynamically  New ways of charging for emerging services  Increased billing openness  Real-time access to account information  The potential for dynamic marketing programs  Increased personalization  Accurate account information allows greater self-care  Selecting a tariff plan from several alternatives  Customizing behavior based on personal information

13. 13 Examples of Dynamic Marketing  Reacting to a ring-tone purchase  Send SMS to congratulate the buyer  Send an MMS that trailers a music video  Offer 25% discount, valid until midnight  Capitalize on impulse buying  Informing of a potential bonus  Offer free local calls when threshold is reached  Inform the user, in real-time, that threshold is 10 minutes away  Stimulate additional calling

14. 14 The Power of Promotions  Introduce a new product  Free initial use of the service  Free use of service in return for reaching calling threshold  Free local calls, SMS or ring-tone when first using service  Stimulate additional usage  Establish a series of thresholds and bonuses  Bonus based on combination of thresholds  Thresholds that are time-dependent

15. 15 Award credit and notify based on payment, usage, or periodic fee ­ Allowance of free calls for a monthly fee ­ $20 fee ­ 120 anytime minutes, 2400 weekend minutes MegaBytes $50 Anytime DataAnytime CallsWeekend CallsSMSCore Balance $100 Currency 5 10 Minutes Messages 60 120 1200 2400 10 20 ­ Allowance of MO-SMS when account is recharged ­ $50 recharge applied ­ 10 short messages ­ Allowance of mobile data as a usage bonus ­ After 60 minutes of international calls, 2 free MB of data An Example of Promotions

16. 16 Real-time Billing is a Challenge  ‘Real-time’ must be part of the fabric of the system  Cannot be “bolted on” to a batch system  Affects all aspects of the system  ‘Real-time’ is technically challenging  Requires a database ‘write’ for every transactions  Processing millions of service requests every hour  Response time must be in fractions of a second  Hot billing or near real-time is a poor substitute  Limits opportunities for dynamic marketing  Account information may not be up-to-date  Cannot inform of bonuses during service delivery  Credit risks and revenue leakage remain

17. 17 Conclusions  There are two ways to improve profitability  Reduce costs  Increase revenues  Real-time billing offers both  Reduce bad debt and revenue leakage  Offer new services rapidly  Stimulate additional usage  Hot billing or near real-time is a poor substitute  “Get it now” vs. “Get it soon”

18. Thank You