The COVID-19 crisis has disrupted virtually every aspect of day-to-day life, so it’s no surprise that communications service providers (CSPs) have been impacted as much as anyone. Fears concerning the novel coronavirus have affected customer behavior, which makes it difficult for CSPs to accurately forecast user demand, revenue generation and other critical factors.
Many CSPs have had to drastically change the way they operate on a fundamental level, and that includes their billing practices. Organizations need to adapt to this evolving situation, if they haven’t already, and remain flexible as new developments unfold.
Coronavirus raises revenue concerns
At first glance, it might seem that the telecom industry would be booming during the COVID-19 crisis. Millions of people in the U.S. are now working remotely, relying on network services to stay connected with co-workers, collaborate on projects and get their work done.
That’s to say nothing of the millions of Americans confined to their homes with little else to do but stream video content, log into social media and surf the internet. According to Cloudflare, internet traffic in the U.S. has increased anywhere between 40% and 50% since the beginning of the year.
Heavier usage should translate into higher revenue, but that’s not always the case. Even major carriers have struggled to maintain profitability in the face of COVID-19. Verizon, for instance, has seen revenues drop year over year, and has forced closed almost 70% of its retail locations. The company has also had to infuse more capital into its operations to support the recent surge in network traffic and maintain high-quality service delivery while facilitating bandwidth-hogging activities like online gaming. At peak levels, Verizon saw a 213% increase in gaming activity on its network in recent weeks.
Although network usage is up, CSPs of all sizes have run into issues bringing in revenue on their delivered services, especially as many of their customers cope with financial issues that prevent timely payment. The coronavirus has wreaked havoc on the economy, forcing businesses across the country to scale back headcount to reduce operating costs and keep the lights on. As a result, unemployment has skyrocketed, with more than 26 million people losing their jobs due to the coronavirus, according to MarketWatch. With no income coming in, many CSP customers have been unable to pay their bills. So, while service usage is up, outstanding collectables are also on the rise.
The inability to bring in revenue on delivered services in a timely manner has had a dramatic impact on the bottom lines of CSPs everywhere. What’s even more worrisome is that many organizations lack the ability to completely monitor every aspect of their billing processes to track outstanding collectables and determine their effect on revenue.
With no end in sight to the coronavirus crisis, it’s more important than ever for CSPs to put billing systems in place that can monitor, track and report on accounts receivables. Establishing clear visibility into the entire billing process will help companies fully understand the impact that nonpayments and other issues are having on their bottom line.
Obligations to CSP customers remain
In some cases, CSPs are obligated to continue delivering services to customers even if those users are unable or unwilling to pay for internet access. Telecom companies are under tremendous pressure to support their customers despite the ramifications it may have on their revenue.
In March 2020, at the outset of the crisis, the Federal Communications Commission presented the “Keep Americans Connected Pledge” to the nation’s broadband and telephone providers. Participants promise that they will not cut off network or phone access to any customers for 60 days since the beginning of the crisis. That includes consumers and small-business users who have not paid their bills as a result of the pandemic. Companies also agree to waive any late fees that customers might accrue due to delayed or missed payments. In addition, they must allow individuals to connect to their Wi-Fi hotspots regardless of whether they are current customers or not.
CSPs that choose to participate in the Keep Americans Connected Pledge and abide by its guidelines need a billing platform that has the flexibility to manage such a complex situation. Legacy systems are often extremely rigid when it comes to late or missed payments, making it difficult to follow the spirit of this pledge while keeping all of the organization’s financials in order.
Provide relief to end users
Regardless of whether they feel pressure from the FCC to participate in its industry pledge, many CSPs will continue to support struggling customers while the crisis rages on. Not only do company leaders believe it’s the right thing to do, but there are customer loyalty and retention benefits to consider.
Providing free services to users during their most dire time of need helps build a strong relationship with those customers that will extend long after the crisis ends. Allowing individuals to defer payments or temporarily suspend accounts gives customers one less problem to worry about. While CSPs may sacrifice some revenue in the short term to continue supporting cash-strapped users, the long-term benefits can easily make up for it. Customers will feel a stronger rapport with their service providers and are more likely to continue using their services once economic conditions stabilize.
The ability to facilitate this level of payment relief comes down to the flexibility of the company’s billing system. When customers ask to have a late fee waived or temporarily suspend payments, CSPs need to have a billing system that can accommodate those requests with ease. There are many different ways to approach these scenarios, from simply dropping late fees for the foreseeable future to extending net payment terms. CSPs may also consider prolonging service contracts to recoup lost revenue.
CSPs face circumstances today they have never before had to manage. Now more than ever, it’s important to have a billing system that can seamlessly navigate the complexities of telecom billing while in a crisis. IDI Billing Solutions offers a flexible billing platform that can dynamically respond to virtually any scenario, helping CSPs adapt to any development that arises while the COVID-19 pandemic continues. Contact our team today to find out how we can assist you during this time of need.