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Wavelo blog post

Junk Fees? Try Innovation, Instead.

The telecom industry is aflutter with the fallout from President Joe Biden’s pledge in his State of the Union address to eliminate so-called “junk fees” common in telecom billing structures. While there is considerable skepticism that this effort will work on the federal level, there is a plausible case that these fees will be closely examined at the state and local levels, and by consumers.

As noted in this recent Fierce Telecom post, and quoting Dan Hays, the technology and telco strategy and policy leader at consulting firm PricewaterhouseCoopers (PwC), “Early termination fees–which can cost customers hundreds of dollars when they cancel their service before the end of a contract period–appear to be a particular target. While they have a bad reputation among consumers, Hays said these charges aren’t a pointless money grab. Instead, they’re designed to help operators recoup ‘costly investments in upfront subscriber acquisition, equipment subsidies, installation and activation from subscribers who terminate service before such investments can be fully recovered.’”

While fees are grabbing the headlines, the reality is that the inefficiencies in telecom’s business support and operating systems (BSS/OSS) are at the root of the problem. It’s why many telecoms, instead of innovating new products and services, stick to what they’ve historically done–including passing costs to consumers. But there is, in fact, a better way for telecoms to protect and even increase revenue while making customers happy.

At Wavelo, our focus is on developing modular, event-driven software that allows operators to make changes on a dime without negatively impacting expenditure. Legacy systems require even the most simple changes, like a change in service fees, to include an update to an entire billing system. A flexible system lets you easily change data and variables, allowing modifications not only to a bill, but also the SKUs for the product in question and the calculation of the bill, all nearly instantly. Furthermore, flexible billing and provisioning systems means that telecoms can introduce new products and services faster than ever before and test them in-market without tearing down and rebuilding entire tech stacks.

Instead of passing extraneous operations costs onto consumers, telcos have the opportunity to leverage efficiencies created with modern software, and use those freed resources to innovate. ISPs can suddenly realize a faster path toward future-proofing their businesses with Value Added Services (VAS), for example. For many ISPs this might be whole home WiFi, security, or adding mobile services–which almost certainly means making changes to the back office. This is quite achievable by moving to a flexible OSS/BSS stack that bills and provisions across all customer, service, and network types.

Many telecoms might see increased attention toward service fees as a genuine business problem. That’s because they are handcuffed with prohibitive technology and inflexible, legacy systems. But with the right mindset and modern tools, it can actually be a huge opportunity to increase revenue while, at the same time, create happier customers with longer lifetime value.

To read the Fierce article, go here.

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