Nanda Kumar Nanda Kumar CEO - Suntec Business Solutions

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‘Converging’ or ‘Colliding’ Worlds?

  • Without doubt, the telco industry’s most over-used and most wrongly used word is ‘convergence.’ Everything has been converging for years now and by its very definition everything should have, by now, converged into one homogeneous blob. It hasn’t happened yet but we are certainly on that path.

    Historically, the ‘c’ term was first used in the early 90s to describe billing systems that could rate and bill for different services on the one platform. Well you may laugh, but those that remember the massive legacy systems of the day (many of which still exist hidden in the dungeons of IT departments) that could only bill for monthly subscription/connection fees and voice calls. After all, there was no need to actually bill for anything else in the fixed line world.


    Then along came mobile networks and with them all sorts of new fangled services like SMS, GPRS, football scores, MMS, etc and ways had to be found to bill for all of them. Initially, smaller billing modules were used and rated records were fed back to the ‘main’ billing system for presentment on the bill. Then came the emergence of the first ‘convergent’ billing platforms that could rate and bill for multiple services on the one platform. These were the heady days of products such as Kenan Arbor, Geneva, BACCIS, SingleView, Daleen and TBMS - to name a few.

    The concept was not difficult to grasp but there was considerable resistance from Tier One operators who did not feel comfortable with risking their core IT operations to a non-mainframe platform. The new mobile entities had no such ‘legacy’ thinking and adopted UNIX and SUN-based systems with glee. Agility and versatility were the key criteria and being able to bill for new products and services quickly became a distinct competitive advantage. Convergent billing, by the turn of the century, had become ‘de rigueur’ and everyone, it seemed wanted to jump on the bandwagon.

    However, the story did not end there. This was also an era of deregulation for utilities. It wasn’t long before electricity companies, for example, starting looking at the benefits of offering telco services to their customers in bundles. Cross industry selling required some pretty sophisticated ‘convergence’ capability and a number of software companies were quick to oblige.

    The next evolution of ‘convergence’ came with the emergence of multiple service plays in telecoms. Fixed operators offering IPTV and data, mobile operators offering high-speed internet access along with video, data and voice. Billing was expected to manage all of these in the post-paid world and, eventually, in pre-pad as well.

    The ability to manage multiple transaction types has become the hallmark of today’s online charging systems (OCS) and rating engines. The telecommunications industry has prided itself on being the leaders in the space but the next level of convergence may change all that. The headlong rush into mobile banking and payments services could be a minefield for telco’s thinking they are just an extension of existing services.

    For a start, the banking and financial industries, including credit card companies, believe they own this space and that they have the systems best able to manage the intricacies of banking transactions. However, banking systems are not all processing in real-time and the telcos are moving hastily to an all real-time environment. The concept of converging financial and telecoms transactions on one platform will be more a psychological challenge for both industries than a physical limitation. The advent of the payment capabilities in smart phones is going to open up a different level of convergence. You can either have ‘as phone with a credit card’ or a ‘credit card with a phone’, depends on who owns the customer.

    Where the greatest issues may arise are where players from both industries partner and have to decide which of their platforms will be best suited to managing the requirements of the new business models. Those vendors with feet firmly planted in one camp, or the other, may be caught out in this ‘new world’. However, those players that have managed to work successfully in both may have a real advantage being able to talk multiple ‘languages.’ Those software vendors may well become the ‘trusted partners’ we hear so much about.

    Nanda Kumar
    About Nanda Kumar Nanda Kumar works as CEO at Suntec Business Solutions
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