Note 59: Wholesale Customer Maintenance

Posted: 28 December 2008

Billers with monopoly or recently deregulated network infrastructure may be required to provide competitors with access to / use of their network infrastructure on a wholesale basis for certain products and services. These products and services are resold to generate price and other competitive pressures against the incumbent network provider. Examples of wholesale customers (resellers) include fixed and mobile phone networks, internet service providers and electricity retailers.

The wholesale relationship

Billers selling their products and services (infrastructure) to wholesale customers that then resell / repackage them to retail customers have a different relationship with the biller than retail customers. The (end) retail customer will have a relationship with the wholesale customer (reseller), but not with the network provider (biller), who provides the infrastructure.

An outline of a wholesale customer relationship is:

A biller with a phone network may sell their products and service to a million individual retail consumers, and may be required (by regulation) to sell their phone network on a wholesale basis.
Phone services may be sold to fifty wholesale 'customers', with each 'wholesale' customer reselling to (say) ten thousand retail customers, each with one service.
Each reseller's phone services competes with the biller in the retail marketplace through their own product offerings.
The biller's phone network will have an aggregated total of 1.5 million services connected, with 0.5 million (50 x 10,000) services offered through its competitors' retail offerings.
An industry regulator will be involved to adjudicate on the wholesale prices at which the biller's phone network's products and services are sold, and to ensure that resellers are not hindered from competing against the biller in the retail marketplace by non-financial techniques (e.g. connection delays, slow responses to inquiries, insufficient billing detail).

When a reseller's retail customer has a problem, inquiry or wishes to make a purchase, they contact the wholesale customer (acting as their own retail biller) who may satisfy their customer with information from their own systems, or make an inquiry against the (network) biller's systems.

The relationship between the biller and its wholesale customers is a commercial one between businesses (business-to-business (B2B)). The biller will address inquiries and maintenance from the wholesale customer's internal staff and systems, not the end (retail) customer. This structure changes the 'identification' step since the inquiries and maintenance are performed on behalf of another party. Dedicated internal teams within the biller and wholesale customer may be used to streamline the processing and ensure that queries are answered in a timely manner. The interface between these teams will be more formal and ongoing than the occasional interactions with retail customers. Measured response times will be important to ensure that both the wholesale customers and their retail customers receive timely responses.

Minimising wholesale cost/complexity

Depending on the customer-specific information required by the biller's network, only limited details may be stored by the (network) biller against a wholesale customer's services. The detailed retail information about services, including their relationships to each other, will be stored in the wholesale customer's (retail) systems. In most circumstances, the biller does not need to understand the (retail) offerings under which they are resold to perform the wholesale (infrastructure) processing.

The billing information maintained by the biller about its wholesale customers will include the wholesale rates, bill formats and their service/account relationships. The relationships between the wholesale account and its services can be simplified to reduce the billing costs to the infrastructure biller. The wholesale customer (reseller) takes the billing details provided by the (network) biller (e.g. usage), repackages it into retail offerings, and bills it to its retail customers using its own retail rates and bill formats.

Wholesale customers may blend products and services from different network providers (billers) to generate the different market offerings sold to their retail customers. Aggregating multiple providers will complicate the wholesale customer's end-to-end provisioning, customer maintenance and inquiry processes since details may need to be sent to, received from and aggregated across multiple external (biller) systems. The infrastructure biller may need to modify their systems (including billing) to support such processing.

Customer Confidentiality

A biller who sells to both retail and wholesale customers may establish 'internal walls' between their retail and wholesale businesses that restrict access to information. This allows wholesale customers to share their confidential plans and customer details without them becoming available to the biller's retail business. The scope of these 'internal walls' can extend across the biller's business systems to include, for example, network provisioning, marketing, and network maintenance systems. This approach isolates retail services from wholesale services and limits a wholesale customer to their own services.

When the biller's retail staff perform an initial lookup using a service or account number, the billing system can identify wholesale customers and limit the details displayed. The biller's wholesale support staff may also be restrained from looking at the biller's retail services and other wholesale customer's details (since all are competing against each other in the retail marketplace). Access to a wholesale customer can be restricted to the biller's customer-specific support team.

Tags: Billing, Wholesale, Customer, Inquiry, Maintenance