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Constant change and disruption is the curse of all operators who aim to survive and thrive in North American communication markets, one of the largest and most competitive telecom markets in the world.
Think about the dramatic growth that’s occurred in: cloud, smartphones, internet, data centers, digital services, and the back office systems needed to support all that.
Operators are running a mile a minute to keep up. And that presents an endless stream of new challenges for the software suppliers who support them. Many of those support firms dropped out in recent years. They collapsed like the Billing & OSS World conference, escaped to less fierce markets outside the telco space, or were absorbed by rivals.
The companies who have survived deserve big kudos for finding a path through the maze. And yet, no telecom software vendor can rest on its laurels today: survival is an on-going process.
Today’s winners come from many backgrounds. Many of the firms were born before the internet. A fair portion of them were privately spun out by telecom operators themselves. And each of them, no doubt, has an interesting story to tell.
We caught up with one such B/OSS vendor, Champaign Illinois-based Communications Data Group Inc. or CDG. The company’s VP, Product Development, Stan Redden, briefed us on CDG’s broad portfolio of billing, BDS, interconnection and service order software and services.
|Dan Baker, Editor, Top Operator: Stan, on your website I noticed that CDG actually dates back to 1970 and a company in the banking industry. Fascinating.|
Stan Redden: Dan, it is interesting to see the unpredictable directions a business takes. CDG began as part of the data processing department within the Bank of Illinois when some of the bank’s biggest customers were local telephone companies who needed to produce some new regulatory reports. After some discussion, we agreed to develop those reports. Soon thereafter the customers persuaded us to develop an end-user telephone billing system for them. This eventually led to our developing the first wireless end-user billing system in the country for GTE.
From there, we went on to produce a carrier access billing system (CABS) and in January, 1984 our system was credited with producing the first access invoice to be received by AT&T on behalf of Alltel. Today, the system is considered to be one of the top billing systems available on the market today and our clients consist of some of the largest telecom service providers in the country from ILECs, to CLECs, to broadband providers.
|CABS has been your leading product category for years. But what will that business be like now that regulators changed the access rules?|
You might be surprised, Dan, but we expect our CABS/interconnect billing to be strong for many years to come. Regulatory changes are ending the billing of terminating access minutes, which are scheduled to sunset at the end of 2020. However, we will continue to bill originating access minutes and facility/special access circuits.
Plus, with the explosion of ‘data’ on the networks, we are experiencing a tremendous growth in the ordering and billing of Ethernet Virtual Circuits that are used to connect and carry this data, which also includes wireless backhaul.
Other technologies such as small cell sites and dark fiber are other services where we're seeing an increase in billing on our product. These new services make up a good portion of the billing revenue we are losing as terminating access minutes phase out.
So to better reflect our capabilities in billing for these new technologies in today’s telecom environment, we recently changed the product name from CABS to BDS-I for Business Data Services and Interconnection ordering and billing system.
|You also have subscriber billing and mediation products too.|
That’s right. On the subscriber billing side we have our MBS application which is building a strong reputation in the market place. Our Mediation product handles the usage and event aggregation and filtering for both the CABS/BDS-I and MBS lines.
Our strong Mediation capability allows us to convert everything into a common format for bill processing by either system. Over the years we’ve gotten very good at normalizing billing data from all kinds of switches and networks including soft switches. That was a challenge when they first appeared on the scene due to the numerous formats each vendor produced.
On the CABS/BDS-I side, we are currently working and nearing completion on developing a service order system for Centurylink. This system will enable them to convert their legacy Century, Embarq, and Qwest markets onto a single/unified ordering and billing system. It will also support ‘real time’ processing of ASRs (Access Service Requests).
|CenturyLink? Sounds like the large telecom players are a big part of your business.|
Absolutely, in addition to CenturyLink, we also provide interconnection billing for other major service providers like Frontier, Bright House Networks, TDS Telecom, Level 3, Consolidated, and certain AT&T markets to name a few. We are also negotiating with a very large broadband provider whom we hope to announce very soon.
Large carriers very much demand mechanized processing. The ASOG and C/BOS formats are the industry standards for ordering and billing and we support both. These carriers already have systems in place to process these formats, so they prefer to not reinvent the wheel nor spend millions writing new systems to support new formats/standards.
Ethernet Virtual Circuits can be billed on the same invoices as their DS1s, DS3s, etc., or broken out on their own stand alone account. Using a format like ASOG and C/BOS allows them to keep the processes they’ve built and refined over the years, which allow for mechanized auditing, accounts receivable, and ancillary reporting.
So we are seeing a big push to bill Ethernet, small cell, dark fiber, and other wholesale billing in a CABS format to support this mechanized processing. It is a very good fit especially when you consider that the vast functionality needed to calculate and discount legacy DS1s, DS3s, etc. circuits is already in place in our CABS/BDS-I system.
|It’s surprising, but CenturyLink is actually the third largest operator in the US now. What’s your take on these big wireline providers? Verizon and AT&T, of course, have divested much of their wireline assets.|
To me, Dan, wireline is still the backbone of telecom — something like 85% of all wireless calls still touch the wireline/fixed network and depend on it to carry their traffic, hence the huge demand for services like wireless backhaul.
Even still, large carriers are looking for huge economies of scale and to invest in places where the long term margins look the best. It's here where AT&T and Verizon are in a different business model from CenturyLink and other large legacy carriers who have loaded up wireline properties everywhere that makes sense: they aim to be major backhaul/broadband providers.
Relationships certainly matter when it comes to Tier 1 players — we’ve enjoyed a long history with CenturyLink and several other legacy providers — yet I think one of the biggest factors in retaining and acquiring new business is helping them become as efficient as possible.
As you know, many of them have funded their own software development for decades. However the focus has changed: today they seek to offload much of their internal hardware and software costs so they can focus on more strategic investments.
|What about the Tier 2 and 3 market who you also serve? What’s your take on the challenges those companies face going forward?|
The tier 2 and tier 3 markets will always be attractive to us: that’s where our foundation is from. The profit margins are not as big as they are working with a large provider, of course, but we have extensive history and experience working with the tier 2 and 3 providers.
Tier 2 and 3 operators are trying to survive in this new world order of digital and IP. Some of them are doing quite well actually, but others struggle.
The challenge for them is to know where they can be efficient and rededicate themselves to their customers. They are constantly looking for new services that will give them a leg up on their rivals. Trouble is, they were hit almost simultaneously by consumer and regulatory changes that negatively impacted their business.
First, wireless got away from them. Some of the problems can be traced back to device offerings — when you’re not offering the latest iPhone or Galaxy S7, wireless is not an easy sell. Other issues like roaming agreements also hurt small providers who didn’t have the leverage to negotiate good arrangements like large providers did. Then they got hit on the regulatory side. The FCC has pushed these companies to redefine themselves and they are also no longer subsidized at the same level as they once were.
The good thing is the world is still hungry for connectivity, so the internet continues to open up opportunities. Verizon and AT&T are not going to directly connect to all those rural communities they are not serving today. That means the ILECs are still essential to providing service in rural America.
|To what extent is your product line moving to the cloud?|
We offer clients three different service options for billing with our systems. We sell licensed versions of our solutions that you can install and run on your computer environment in-house. Or, on the other end of the spectrum, you can send all your CDRs, access orders, and other table activity to us and we can process it at CDG in a full service bureau arrangement. We also offer a cloud based online solution where their reps can view and control all system tables updates in real time while all the data is stored on our servers.
The trend is unmistakable though: more and more, carriers are moving away from hardware and software costs. The other advantages in moving to the cloud are in the time and expense spent on disaster recovery and SOC compliance of supporting a full IT environment. It really comes down to the efficiency angle I talked about. There’s tremendous demand to offload costs and complexities and allow your company to focus on its core business objectives.
|How about cost assurance among the North American players?|
Cost and revenue assurance is a constant battle. You still have companies trying to avoid paying access charges or creating ‘phantom’ traffic. Incomplete CDR recordings are a key component to how these practices can still happen.
One of the more useful things we’ve done is to build automated processes to detect up/down fluctuations in a given month, so operators can investigate those spikes quickly. That’s key because if they don’t resolve issues right away, it can lead to lengthy disputes and cash flow troubles.
|In years past, accurately identifying the local jurisdiction of traffic was a key problem on the access side.|
Yes, that was a big issue for billing disputes in the early to mid-2000, but is less so today. It really depends on the traffic flow, their recording capabilities, and how a particular operator is situated in a LATA and state. One thing that has really helped in this area is vendors, like Teletech, who support nationwide calling route tables that can discern a local call from an IntraLATA call.
|Stan, thanks for the fine briefing. CDG has a lot of hot irons in the fire.|
Thanks, Dan. We’re very excited about the future as I stated earlier, as we are still seeing a lot of activity in our niche of interconnection billing as it branches out into these new technologies. That’s why we made the decision to rename our CABS product to BDS-I, or Business Data Services and Interconnection.
We also look forward to new opportunities coming from the new Service Order application we are nearing completion. This will give us another product/service to push in the marketplace. So we are working hard to take full advantage of these new opportunities as they present themselves now and in the future.
Copyright 2016 Top Operator Journal