By: Leonard Sheehan, Product Marketing Senior Director, Oracle Communications
The traditional role of monetization changes when telcos transform how they operate. This can happen either through a digital transformation program or through functional separation into a ServCo / NetCo model to focus on innovation and execution in each respective component.
Let us consider a couple of examples from across the spectrum of possibilities to highlight differing approaches to achieving positive business outcomes and the important role of monetization in their realization.
First, consider the scenario of a telco creating new digital brands and the role of flexible monetization to drive their success. One example is KDDI Digital Life (KDL). KDL first launched the “povo” digital brand in 2021 to give customers more control and convenience at their fingertips. Their goal was to offer an outstanding user experience for digital-native customers. KDL markets to a digitally savvy gen Y/Z demographic and empowers its customers to alter their plans flexibly with more personalized experiences spanning a partner ecosystem. The company noted its BSS stack (provided by partners) was a critical differentiator when offering services and delivering superior CX in a crowded market. The result of such an approach is that KDL’s net promoter score, a key measure of customer satisfaction, is significantly higher than other industry players in Japan. This culminated in KDL subsequently being recognized as the leading Digital Telco in Japan, a notable feat in the home market of digital disruptors.
Of equal note were aspects of KDL’s market launch and growth. The solution was deployed entirely in the public cloud taking roughly 16 weeks for market introduction and leveraged a build-operate-transfer model for seamless handoff. Central to much of this success is the overall customer experience including agile charging, policy, and billing – in other words, flexible monetization. All of this is neatly outlined in a recent case study.
Now let’s switch gears and consider the telco tower business. This segment of the market has been transforming with telcos divesting their tower assets and resulting in the emergence of TowerCos.
These are incredibly complex businesses. They provide and manage tower sites at which telcos operate their core network. Each tower site operated by a tower company can have multiple telco tenants. This requires a significant degree of sophistication and flexibility in monetizing, as multiple parameters are used for pricing – number of tenants, energy costs and source, and weight of equipment, to name a few. Not to mention the frequent need to backdate charges due to late updates.
Moreover, service and billing agreements between the TowerCo and telco will vary from business to business. As each telco requires the use of multiple towers to operate, service agreements and pricing can also vary from site to site. This highly dynamic nature of the tower business makes it challenging to automate billing operations which has a trickle-down impact on cost and time to serve for TowerCos.
Working with multiple leading TowerCos, it’s safe to say this is not your standard telco monetization customer – they don't deal with subscriber plans, but they do bill their customers (telcos) – for space and model and often have master service agreements that are incredibly complex with large partner ecosystems (70 in one instance alone).
For TowerCos, the ideal monetization approach enables TowerCo to offer and bill for any clause or structure in the master service agreements for each tenant at every site. This can be achieved by automating the business rules with an integrated solution comprised of solutions like Oracle Cloud Scale Billing and Oracle Intelligent Advisor. The key benefit of this solution approach is it enables TowerCos to translate complex master agreements into charging algorithms using natural language. Driven by the needs of their business and customers, solutions like Oracle Cloud Scale Billing ensure they are not constrained by technical complexity from the back office. This policy-driven method of billing has, in turn, improved plan customizations, increased customer satisfaction, and improved automation.
These examples, drawn from different parts of the telco market, illustrate the need for flexibility in monetization. The key takeaway may well be that regardless of where you currently are or plan on going, this type of agility has never been more important to driving ultimate business success in the 5G era and beyond.