Online Billing a Win-Win for Phone Companies and Consumers Alike

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BOONTON, NJ. March 1, 2000:

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Phone companies will save over $36 million this year when residential customers use their carrier's online billing service to pay the monthly phone bill, says a new report by Insight Research. Shifting consumers to an online environment will reduce phone bill processing expenses and customer service transaction costs, saving telcos nearly $400 million by 2004.

According to Insight's report Online Customer Care and Billing, phone companies spend an average of $2.50 each month on printing, mailing, processing, and collecting a household's telephone bill, but electronic bill payment and presentment (EBP&P) can cost just 20 cents. A typical customer service inquiry via a toll-free line can rack up an estimated $1.44 in phone company expenses, whereas a customer interaction over the Internet costs only four cents per transaction. In addition to the cost savings benefit to the carrier, the potential for cross-selling online can be enormous. Carriers can tailor offerings based upon customers' unique calling patterns and service preferences without interruptive telemarketing calls or frequently overlooked bill inserts. The challenge for the phone companies is to convince consumers that there are true benefits to online billing and convert them en masse.

"If online billing and customer care is done well, it will enhance customer loyalty and satisfaction and increase customer use," says Robert Rosenberg, president of INSIGHT. "Phone companies understand the benefits of online billing, but consumers need to know that there's something in it for them, too. We expect to see lower calling rates promoted in order to facilitate online billing enrollment."

Additional market forecasts are published in Online Customer Care & Billing. This report provides five-year forecasts of households using EBP&P for phone bills and the associated telco costs savings. Results from Insight's primary consumer survey of billing problems and resolutions in long distance, Internet, and wireless bills are presented. See www.insight-corp.com/isp.asp for a study excerpt and table of contents.

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Donna Savino

at Insight Research

973-541-9600