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Market & Competitive Analysis
Market Analysis
With incumbent local exchange carriers (ILECs) and competitive local exchange carriers (CLECs) entering the market, the age-old challenge of billing for services became a challenge. CLEC’s rush to gain a competitive advantage could not execute in all areas of customer service, including billing services, which would seem to be the most integral part of the puzzle. It is into this sector that Triton made its market entry, seizing the opportunity to enter the deregulated market and specialize in billing and clearing services and providing these services to CLEC’s and LEC’s. Triton is realizing significant growth from large Telco’s by providing billing solutions. Triton can negotiate New Service Agreements and test them, thereby producing a more “rapid time to market” approach for new customers. This aggressive “to market” mentality allows Triton to appeal to Large and Small companies alike with brand new “billing paths” that include new products and services. Triton’s vision encompasses the changing market place. Triton’s ability to react quickly to the changing market makes them an attractive alternative to costly in-house billing systems.
The idea of “revenue leakage” is generally perceived as a clever metaphor for telco-specific billing issues. This relatively small problem could be an expensive proposition for Telcos who do not have the capacity to capture accurate call records. Triton’s sophisticated billing solutions eliminates this concern for its customers making Triton an attractive alternative to “in-house” billing. The fundamental elements that contribute to revenue leakage in Telcos also exist in many other industries, and will soon be intensified as online electronic billing is adopted. Basic ingredients: take torrential volumes of micro-transactions in aggregate; stream them through a poorly integrated system that’s held together with the digital equivalents of staples and string. Then try to slice and dice, meter and tariff the flood of micro-transactions at various control points within the rickety system, and recombine them into coherent, personalized customer billings without losing any revenue or customers along the way. Add a ferociously competitive and volatile playing field that does not allow the luxury of time to develop a common billing platform. Result: systems leaking revenue. Similar scenarios exist in other industries such as utilities, financial institutions, mutual funds and data warehousing organizations that are getting involved in e-commerce. There are lessons to be learned from the Telco experience. Revenue leakage problems are typically brought to the CFO’s attention via abnormal financial results or the Customer Service Center in the form of customer complaints. However, the CIO is responsible for investigating and understanding the problem. The Revenue Leakage Problem: Telecommunications industry analyst’s estimate that between two to five percent of all billable-minute revenues are lost because of absent or incorrect billings. Telco’s typically focus on revenue leakage only when a major fluctuation occurs in financial results or billable metrics. Unfortunately, this approach is misguided, as there are many significant revenue leakage problems that may not turn up in monthly trend analysis reports. For example, if a rating table has not been updated and is incorrectly charging eight cents instead of 10 cents a minute, the total amount of revenue generated for the service may appear stable from month to month. Lack of fluctuations in financial reports can result in the failure to alert a reviewer to the rating error, so the problem may remain undetectable for a long time. Assumptions that revenue leakage problems will turn up in financial results are dangerous. Revenue loss can occur in any element of the revenue stream, from new product development to systems (switches, order and provisioning, rating, invoicing) to back-end customer support. Given the sheer scale of transactions processed by a typical Telco, the total dollar amount of money washing down the drain due to leakage can be substantial. Revenue leakage is often treated as a billing issue. Auditing calls from switches, making sure rating tables are properly maintained, verifying accounts receivables, checking invoices for completeness - these are all billing-related activities. If the charges aren’t on the bill properly, the billing organization has failed. But it is important to remember that revenue generation crosses many departmental lines. One department is not in control of the revenue stream. One department is not responsible for all the elements on the invoice. One department is not responsible for new product development. Ultimately, no one department is responsible for customer satisfaction. As each department passes information and responsibility onto the next, the chances for breakdowns increase. Factor in high transaction volumes, multiple processing systems and frequent reliance on third parties, often competitors and you have a recipe for leakage. Transactions travel across multiple systems and are handled many times before reaching their final destination in a recordable and billable format. Ensuring processes, systems and people are all working together with the appropriate controls in place is a monumental task. Revenue leakage happens at the weak links in this intricate and highly complex process. Yet the CIO bears the brunt for any issues that may occur. Cross-Industry Issues: Systems Under Stress: It would be a gross simplification to view the problem as a change control issue. The aggressively competitive environment that Telcos inhabit moves, changes and shifts too quickly. Traditional and time-consuming change control procedures are not enough to deal with the accelerated pace of change. New competition caused by deregulation and advances in technology have transformed the telecommunications industry. Mergers and acquisitions are now common in an industry that saw little change over decades. New services are now brought to market in weeks rather than months or years. And customers who were locked into a single provider can now shop around, forcing customer service issues to the forefront.IT teams at these telecom companies are charged with implementing changes resulting from demand for new services and mergers and acquisitions. A job that once focused on building and supporting monolithic mainframe systems in a stable market now involves creating and introducing new revenue-generating services. “Most telecommunications systems are based on 1970’s technology,” says Mark Temmings, an account manager for Ohio-based Convergys Corporation. “They were built to support a regulated market, one very structured and rigorous in nature.” The main task today is to build, deploy and support these new services, and speed to market is critical. The problem is that telecom companies have traditionally used the silo approach to deploying operations support systems like billing, ordering, provisioning and other functionalities for each service. These mainframe-based legacy systems typically do not communicate well, if at all, with one another. The true challenge, which is ultimately one that many industries understand all too well, is integrating product-oriented legacy systems with new customer-oriented systems that are frequently web-based. Advances in technology further compound the problem: Service convergence is the Holy Grail for most Telcos. The idea that single, next-generation providers will deliver voice, video, data, Internet access, wireless voice and even cable offerings over a common infrastructure. Executives love the idea, and customers are eager. Equipment suppliers are delivering technology that can support many different services over a common network. Many carriers have the desire and the means to offer consolidated voice and data products, bundled discounts and even one-rate packages that combine many different services. But until they can be properly and reliably billed, such convergent offerings are just another dammed-up revenue stream. If a carrier wants to offer six or seven different services, it will be necessary to buy, install and maintain six or seven different billing systems. Off-the-shelf solutions to integrate, or more accurately, to mediate disparate systems and generate a consolidated billing are being developed but they’re rarely complete solutions. And they are always painful, requiring monumental effort to implement and tailor to a specific provider’s fragmented systems environment. Moreover, a common billing platform may solve the customer service problem, but it won’t ensure the billings are right - although it would reduce the number of weak links in the processing cycle that might result in incorrect billings. Many providers like AT&T, MCI WorldCom Inc and Sprint have come up with aggregated billing systems that, in essence, pull information from many billing systems and “staple” it, digitally speaking, on one piece of paper at the end of the billing cycle. That is a far cry from truly unified billing platforms, which are still largely non-operational. For now, Telcos are adopting an interim step of aggregating the information from disparate legacy systems and putting a new front end on the system. Hence, today’s billing system reality is “electronic stapling” rather than true electronic, converged billing. But this interim measure is indeed temporary: The relentless market does not permit complacency. Customer interest in electronic commerce in general, and electronic billing in particular, is forcing carriers to move quickly. Unfortunately, having reasons to embrace Internet-based customer service doesn’t necessarily provide answers on how to do it. Electronic bill presentment adds the additional major headache of processing online billings in real-time rather than batch processing. Traditional providers, saddled with legacy systems and manual internal processes, face the daunting task of not only getting information on the Internet, but also automating the systems in the first place. Newer providers may not have legacy systems to worry about, but they face their own challenges, like limited funds and aggressive growth systems may not be able to support. All providers are faced with spending time and money educating customers about their Web-based services and marketing them. Aggressive market conditions, M&A activity, services leading to increased customer service requirements, inability to integrate legacy systems, lack of common billing platforms, accelerated new product development, e-commerce issues: these business issues are hardly unique to telcos. On the contrary, these are challenges faced by most industries. Telcos are, however, in the unique position of being first at the gate. Revenue leakage problems are the symptoms of systems under stress. Systems stapling is at best an imperfect interim step. Even implementing a common billing platform may only succeed in alleviating certain problems. Is there a way to minimize technology risk in a volatile market characterized by shifting technology? The solution lies in adopting risk management techniques.
Despite the fact that the consumer bill is a priceless piece of telecom real estate, many carriers fail to utilize it as an effective marketing medium. Billing and customer service are still considered expense items on a carrier’s balance sheet, yet they remain the only real customer interaction in an otherwise commodity market. When the telephone industry finally introduced a billing innovation, problems ensued. Third party billing, intended as a convenience, leaves the door open to unauthorized charges or “cramming,” practice that tarnishes a phone company’s image. While the problems related to phone billing is nothing new, measuring the impact of billing on consumer switching patterns is. Billing Invisibility: Account Control and the Telecom Consumer utilizes a primary demographic survey to quantify customer response to telephone bills, number of billing problems, timeliness of resolutions, cramming experiences, and propensity to switch carriers. WHAT DOES THIS MEAN TO TRITON? - While it may be true that Oracle and Lucent have built an enormous “billing engine”. It is Triton that creates the required “billing path”! It is one thing for Oracle or another entity to generate a “record”. It takes Triton’s integrated, powerful billing solution to process that record and land it on the consumer’s bill. This needs to be done clearly, accurately and reliably utilizing FTP data transfer protocols to ensure that the most important issue is addressed – Triton ends up with a satisfied customer who can understand and appreciate what, how and why he or she was billed for an event in the first place!
Electronic Billing From Wall Street to Main Street, the Internet has quickly become part of our everyday language. But the question remains whether the average consumer household feels comfortable enough with the technology to believe it is the best place to pay their bills and receive customer service. Moving customer care and billing to the Internet offers telecom carriers an opportunity to lower billing processing costs, improve upon the cumbersome paper bill, enhance targeted marketing efforts, and more efficiently handle customer service inquiries. However, convincing consumers that Electronic Bill Payment and Presentment (EBP&P) provides time- and cost-saving benefits to them will be a challenge. Only five percent of consumers surveyed prefer exclusively using the Internet for customer support. Insight forecasts that more than one million residential customers will register for online phone bill payment service this year, saving the carriers an estimated $36 million. An online bill will cost a carrier just 20 cents to produce and process—considerably less than it costs to print, mail, and process a paper bill. The cost savings simply cannot be ignored, especially on the customer service side, where a customer inquiry via the Internet could cost as little as four cents. Wireless Billing Just how quickly will Americans make a wireless phone their only phone? The media publishes stories about it at least once a month, but are we looking at a phenomenon confined to a college-age cohort group or at something that is spreading more evenly throughout society? Insight’s research found that, depending on the type of household, as many as six out of ten people would consider using their wireless phone as their primary phone if the costs were equal. And with wireless per minute prices falling and penetration rates growing, 2000 is shaping up to become a watershed year for the cellular industry. Currently only six percent of all the calls made in the US are made from a wireless phone, but this number is predicted to increase to 9.6 percent by 2000 and to 12.7 percent by the end of 2002. By 2005 worldwide wireless traffic is expected to account for 25 percent of the total traffic, up from five percent in 1998. As wireless continues to decline in price, more and more consumers are using their wireless phones as a replacement for wired or landline phones. Actual substitution, where customers disconnect their landline phones, is still years away however. Consumers will keep their regular home telephone as a back up for voice calls and as a means for broadband access to the Internet. The quality of wireless calls must improve before consumers rely on wireless as their primary service. Competitive Analysis
Billing Concepts - Billing Concepts is a provider billing clearinghouse and information management services to the telecommunications industry. Billing Concepts offers services that process call records for telecommunications companies nationwide. They track and process bills for telecommunications services that range from local and long distance calling to paging, voice mail, Caller ID and others. Typical Time to Market for New Customers – 8 Months average Differentiator: Billing Concepts is a large competitor of Triton Global Communications. Triton, however, has been able to identify key areas in multilingual operator services that will provide an edge over this competitor. Integretel - Integretel offers outsourced billing and collection services through the local phone bill, a direct bill, or an online bill. Integretel has billing and collection agreements covering all Regional Bell Operating Companies, GTE, and several LECs in North America. Integretel provides consumers with secure, simple, and convenient payment methods, which enhance their ability to collect. Typical Time to Market for New Customers – 90 Days plus Differentiator: Integretel is a competitor of Triton Global Communications. Triton offers more comprehensive services and also has a much larger hold of Canadian clearing contracts.
AT&T - AT&T provides voice, video and data communications companies, serving consumers, businesses and government. In 2000, AT&T had annual revenues of nearly $66 billion. Backed by the research and development capabilities of AT&T Labs, the company runs the largest communications network, and is the largest cable operator in the U.S. AT&T is also a supplier of data and Internet services for businesses and offers outsourcing, consulting and networking-integration to large businesses. Telus - TELUS Corporation is one of Canada's leading telecommunications companies, provides a full range of communications products and services for Canadians at home, in their workplace and on the move. Typical Time to Market for New Customers – 12 Months approximately Verizon - Verizon Communications is a provider of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States with 112 million access line equivalents and 27 million wireless customers. Verizon International has investment interests in telecommunications companies in 19 countries, with a global presence that extends to 40 countries in the Americas, Europe, Asia and the Pacific. Verizon International has 3.2 million proportionate access lines and 8.3 million proportionate wireless subscribers. Verizon is a Fortune 10 company with approximately 260,000 employees and more than $65 billion in annual revenues. Typical Time to Market for New Customers – Over 90 Days Differentiator: Triton may not be able to compete with large telecommunication providers on a revenue scale, but Triton does have the ability to meet the ever-changing telecom market’s fast paced changes quickly. Larger Telco’s like AT&T, Telus and Verizon are turning to Triton for contract billing services. As Telco’s get more and more competitive and try to block the exchange of call records between each other, Triton is positioning itself to clear these call records between the battling giants. Internationally, Triton is already proving to be an attractive option too many Telco’s as a cost effective way of billing calls in and out of Canada. Another interesting fact is that most of these “competitors” are restricted from entering the Canadian marketplace due to regulatory issues. This means that these “competitors” can also become Triton “customers” in certain segments of their business, particularly when it comes to providing services to all outside competitors who wish to bill for Canadian Services. Again, it is Triton’s “rapid time to market” that makes Triton so attractive!
In addition, the technology platform currently being deployed will allow Triton to compete with carriers and companies providing live and automated Operator Services both domestically and, with its multi-language capabilities, on an international basis. Hospitality: International Markets (4 and 5 star Hotels) estimated Market Size greater than $2B with a 5% annual growth rate Competitors:
Triton Strengths: Its Canadian based low cost infrastructure coupled with fewer regulatory encumbrances than North American carriers. Full suite product offering including 0+,0-, 1+ with web-based reporting, IP enabled services including Enhanced Directory and Information Services (EDA), International Directory Service (IDA), integrated with multiple language support and over the phone interpretation (OPI), & Translation.
Hospitality: Canadian
Market (6321 properties, 358,000 rooms) estimated Market Size of $50M
with a 3% annual growth rate
Triton Strengths: The Triton Operator services platform will enable the customized bundling of traditional and web based emerging services such as: 0+,0-, 1+ with web based reporting and customer service, IP enabled web based services including Enhanced Directory and Information Services (EDA), International Directory Service (IDA), integrated with multiple language support and over the phone interpretation (OPI), & Translation. Internet e-Business/Commerce “Click to Talk” Web-Site Support: Over $30B annually is abandoned in Internet shopping carts rather than completed and purchased on commerce enabled web-sites. Assuming a 25% recovery rate through the use of “Click to Talk” technology the estimate for this market in North America alone is approximately $100M. Statistics are not available for global markets however it is believed that with the strength of Triton's multi-language capabilities these markets will be targeted as well. Competitors:
Triton Strengths: In-language Operator/Agents trained to provide customer service and transaction fulfillment. Triton's web based services are provided with multiple billing options including Credit Card, Calling Card and Bill to the Monthly Phone Bill. This technology can only be effectively provided by using an Internet Protocal (IP) enabled voice over IP (VOIP) platform. Based on this Triton is well positioned over legacy teloc providers. Triton is able to replace a clients traditional Call center with a virtual operation at a fraction of the cost.
Triton Strengths: Its IP enabled Virtual Nurse Triage capability increases productivity by allowing Nurses to answer web initiated calls from any high speed internet connection as opposed to working a regular shift in a traditional Nurse Triage Call Center. Through its multi-language capabilities Triton is able to provide patients with integrated access to accredited interpreters in multiple languages. Triton's video enabled IP switching and DVD patient record creation is a evolving requirement for this expanding industry. Triton is able to provide global compliance with emerging “informed consent” government legislation. IMPORTANT DISCLAIMER Investor Communications is an independent electronic publication providing information on selected public companies. Any company profiled by Investor Communications pays cash or stock consideration for the electronic dissemination of the company's information for a specified time period and/or our comments about the company and/or our development of the company's website. Section 17(b) of the Securities Act of 1933 requires that Investor Communications fully disclose the type consideration (i.e. cash, free trading stock, restricted stock, restricted stock with registration rights, stock options, stock warrants, or other type consideration) and the specific amount of the consideration our company receives or will receive, directly or indirectly, from an issuer, underwriter, or dealer. No information contained in our website or our publications should be considered as a solicitation to purchase or sell the securities of the profiled companies. Investor Communications is not a registered investment advisor or a registered securities broker dealer. We do not undertake or represent to make investment recommendations or advise pertaining to the purchase or sale of the securities mentioned in our web site or publications. The information contained in our website and publications are carefully compiled by Investor Communications based upon sources that we believe to be reliable. Investor Communications, however, does not guarantee the accuracy of any information contained in our website or publications. Moreover, Investor Communications does not endorse, independently verify, or assert the truthfulness or reliability of any statements or data made by us or the profiled companies in our website or publications. Investors should not rely solely on the information contained in our website or publications. Instead, investors should use the information provided on the profiled companies only as a starting point for conducting additional research that will permit them to form their own opinions regarding an investment in the profiled company's securities. The receipt of the information contained in our website or publications shall not create, under any circumstance, any implication that there has been no change in the affairs of the profiled company since the date of our comments regarding the company or the date of the profiled company press releases or other information disseminated via our website or publications. The information contained in our website and publications may pertain to small cap and/or thinly traded securities which by their very nature involve an extremely high degree of risk. An investment in these type of securities could result in the loss of some or all of an investment in the company. In addition, due to the illiquid nature of some of these securities, an investor may find encounter difficulties in liquidating the securities. Investor Communications may liquidate the stock consideration it receives at any time it deems it appropriate to do so. The liquidation of our stock may have a negative impact on the securities of the company liquidated, including decreased market value and/or dilution of the company's securities. The following companies have paid, or have agreed to pay the parent company of Investor Communications to: distribute the company's information and reports in an email newsletter; post company links on featured companies page, and compile and distribute quarterly reports in an email newsletter. BSD Software Inc. has paid 15,000 shares of free-trading company stock for Investor Relations and research services for a period of six months. |
