While international telecoms operators could save $23 billion by 2003 by enabling customers to pay bills online, European carriers may not find it easy to reap the benefits because of regulatory restraints.
According to a new report by analysts, Killen & Associates, dubbed 'Telcos and Electronic Bill Presentment and Payment (EBPP): When it Comes to Making Money', nine per cent of customers will receive their bills electronically by next year and 15 per cent will pay the same way, using either the Web or computerised methods such as direct debit.
But Karl Duffy, author of the report, said that by 2005, some 70 per cent of customers would view their presentments electronically and 80 per cent would pay online. This, he claimed, could help US telcos reduce the cost of billing each customer to $0.40 from $1.25, while bill payment could be cut to $0.10 from $0.50.
However, although Europe would lead the way in electronic payment because the direct debit mechanism was more advanced in the region, European telcos would need to overcome regulatory issues that were currently slowing down the take up of EBPP.
These issues mainly focused around local phone charges for Internet access and the regulated use of consumer information under the Data Protection Act, explained Duffy. And unlike their European counterparts, US telcos could use information collected about their customers' usage patterns to better target the adverts they put on their electronic bills.
Duffy said: "There is consumer reluctance to provide personal information, which be exploited by data mining to target advertisements by banner ads."
But the direct debit payment method also leaves telcos in danger of damaging their customer relationships because the transaction is handled by the banks. Despite this, however, Duffy believes that EBPP will provide consumers and telcos with a taster of full blown ecommerce.
"Once you have an electronic relationship and a payment channel, ecommerce is a small step away, so electronic bills are very important for companies wishing to enter this market," he said.
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