The real cost of telecoms bills

The growing diversity of telecoms operators and products being used by companies will make it increasingly difficult to allocate...

The growing diversity of telecoms operators and products being used by companies will make it increasingly difficult to allocate purchases to individuals or manage costs

To understand today's telecoms billing procedures in the UK we need to take a step back in time and look at how things were a couple of decades ago.

At that time there was just one supplier with a monopoly over telecoms, and only the old-fashioned phone line. Facsimile was in its infancy and premium-rate lines had not been thought of. The only items to appear on the bill were the charges for line rental and the cost of calls made, together with the number of "units" used.

Corporate bodies, retail chains, hospitals and local government offices had to analyse their bills to break down call charges into local, national and international totals, but it was relatively straightforward. The bills would be signed off for payment and the accounts department then sent the cheque for payment - all very simple.

Fast-forward a few years and all of a sudden it is a whole new ball game. The vast improvement in technology has opened up a new world for the telecoms industry. In the space of just a few years most companies have gained access to a wide range of communication services, including the Internet. But the mobile phone is predominant. In addition, the UK monopoly of the service provider has been destroyed and vast numbers of new telecoms operators have sprung up offering diverse services.

So what has this done for billing? In simple terms, metering and billing have become hugely complicated because of the number of different services available from an ever-changing list of licensed operators.

Today's telecoms bill contains a wealth of information that could be a valuable asset to corporate institutions wanting to improve productivity and control costs. It could even provide the means to monitor sales campaigns and provide invaluable statistical information to enable analysis, and control costs. In other words, your bill could be a refined database.

However, this also means an increase in costs for end-users, which have to employ teams of clerks, telecoms administrators and telecoms managers, not to mention the customer service departments and billing account teams inside the telecoms operators who are battling away trying to win new business, as well as trying to provide the best rates for the service. In effect, all this is a hidden or below-the-line cost which will inevitably be met by the consumer.

There are other issues at stake. Billing errors, for instance. Many new operators rely on billing provided by larger operators, and errors can include over- or under-charging, both difficult to trace and rectify.

Clearly this is only the tip of the iceberg, but what does it mean for the end-user? Confusion is the most likely outcome, given the vast array of different operators and diverse services on offer.

But at the end of the day it all comes down to costs. Accurate billing by the operators and correctly selected services, together with good housekeeping and management by the end-user, will give an acceptable result. Not 100% accurate, perhaps, but still acceptable.

So what about the future? E-billing is taking suppliers and consumers into the Internet age.

The mobile phone can now be used as a means to purchase third-party goods and services, with the charges allocated to the phone bill (this is already happening in Scandinavia). The growth of mobile telecoms will continue at a phenomenal rate, with ever more complex billing structures evolving as a result.

This will inevitably lead to an additional strain for companies seeking to allocate purchases to individual departments or personnel.

Poor billing already costs the telecoms industry £1bn a year. Withheld payments arising from disputed bills costs the industry £800m a year for every two weeks delay in payment, so it is in all our interests to get this right.

Paul Fegan is chairman of the Communications Management Association's Billing Special Interest Group

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