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. Last Updated: 07/27/2016

Tattered Billing Systems Draw $100M Upgrade

MTSvyazinvest is introducing the new billing systems in three stages over three years.
An often overlooked part of the telecommunications enterprise, billing has taken the spotlight as the Svyazinvest holding seeks a company to install billing systems at its dozens of subsidiaries nationwide for $100 million.

One of the most complicated elements of the telecommunications sector, billing systems not only update clients' accounts, they simplify the job of recording penalties, disconnections and the number of people still waiting to receive a telephone.

"Billing systems are the chief interface between operator and client," said Andrei Radkevich, technical director at Lucent Technologies. "Regardless of how the communications network is operating, however reliable and high-quality the service might be, the volume of the operator's income received from these services depends on the quality of the billing system."

Cellular operators, whose incomes initially depended on the length of subscribers' calls, use the most expensive billing systems. But fixed-line operators did not think about billing until plans for per-minute payment for local telephone calls were introduced last year.

According to developers, foreign billing systems cost between $15 and $20 per telephone number, while local systems cost between $0.50 and $1. The best-known international billing systems are Israel's Amdocs, Kenan Systems and Portal Software of the United States, and Germany's TelesensKSCL.

Samara-based Giprosvyaz developed one of the first Russian billing systems, Parus, at the end of the '80s. Now more than 150 systems are certified on the Russian market.

Five systems have been recommended for implementation, and they are being developed by the following: Russian companies Amfitel, Infosphera, Martelcom and Yartelecom, and Mediatel, a subsidiary of the Czech Republic's Strom Telecom.

Svyazinvest is planning to introduce the new system in three stages over the next three years. Some 10 percent to 15 percent of the $100 million will go toward billing software, while the remainder will be used to buy equipment. Rostelecom subsidiary RTK-Leasing has been chosen as general contractor for the project.

"The need for substantial capital investment in this area can be easily explained. Until now many of Svyazinvest's subsidiaries used their own home-grown software," said Irina Shibayeva, general director of Startkom, a company created by Svyazinvest to study billing systems and other new technologies.

Earlier, regional companies implemented their systems independently by bringing in whatever specialists they could find, often leading to the installation of incompatible software in different regions of the country.

Recently, the number of subscribers has increased, and such broken-up accounting has become unwieldy both for operators and for users. Furthermore, with the merger of Svyazinvest operators into seven super-regional companies, billing systems will need to be combined.

Svyazinvest began its quest to locate designers for its billing system three years ago; but in the meantime, several companies have begun their unsuccessful billing projects separately.

Novosibirsk-based Elektrosvyaz said that for two years Mediatel has been unable to successfully implement its billing system. Mediatel rejects that claim.

"Elektrosvyaz simply asked for new components that had not been agreed to in advance," said Alexei Osipov, Mediatel's senior engineer.

Uralsvyazinform hired Alcatel to install a $3 million billing system. However, an official at Uralsvyazinform who declined to be identified said the system has yet to begin functioning. "Local programmers had to write extra software and set up programs specially for themselves," he said.

Russian company Infosphera has had better luck with its Start system.

"Based on the results of a tender held between 10 communications companies in various regions, the Start system was chosen," Shibayeva said. She said that based on this system, unified accounting rules for other subsidiaries could be formed.

Svyazinvest is already looking at Western companies to install a more powerful billing system in the future.

"In the future, when new structures are strengthened, they will need more powerful designs, and then we can hold a tender attracting better-known foreign companies that are used by the biggest mobile operators," Svyazinvest said.

North-West Telecom, however, decided to try out a Western design at once, and the company plans to sign an agreement with TelesensKSCL for a new billing system, North-West spokesman Kirill Voloshin said.

TelesensKSCL said that after modifications have been made to its billing system, the company could be put in charge of standardizing all of Svyazinvest's subsidiaries.

Western companies say that the main problem with billing systems is the need to adapt to the peculiarities of the Russian market. Pensioners' benefits systems, for example, need to be taken into consideration.

"One pensioner might have part of his daily bill paid by a military commission, the other part by his previous place of work and the other portion he might pay himself," Shibayeva said.

The cost of such modifications will amount to 40 percent of the initial value of the contract, experts said.

"Since billing systems are a product that often requires significant modifications, attention must be paid to the supplier itself, its experience on the market, qualified technical support staff as well as proximity to the client," Radkevich said.