Discount in telecom billing refers to a decrease in price or advantage offered on a customer’s service charge depending on the various conditions. Discounts are an important billing component that aims to:
🟢 Retain customers
🟢 Attract new users
🟢 Reward loyalty
🟢 Encourage higher usage
To promote new products and be competitive in the market, discounts are used as a pricing strategy — both a billing component and a marketing strategy by telecom service providers.
Business Impact of Discounts
Pros:
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- Create customer delight and loyalty
- It facilitates upselling and cross-selling
- Catches price-sensitive customers
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Cons:
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- If poorly managed, reduces ARPU
- Very complex to set up and track
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Positioning of Discount in the Billing Lifecycle
The discounts are Adobe in telecom billing:
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- Tariff – Specifies rates according to the services.
- The usage of services is collected (calls, data, SMS, etc).
- Discount – Discounts are applied based on services, tariffs and business strategies.
- After the discount, the net charge is calculated.
- Invoice – The final bill is prepared and sent to the customer
So discount generally applies after tariffing but before charging, which impacts the total amount the customer is supposed to finally pay.
Discount Types in Telecom Billing
Here is a classification of the most common types of discounts, along with examples:
1. Fixed Percentage Discount
Definition: The percentage of a specified amount applies either to the original price of service or to the total bill.
Example: 15% on all international calls for postpaid customers.
2 . Fixed Amount Discount
Definition: A specified amount deducted from the total amount.
Example: $10 off the base price of data service for customers exceeding usage of 20GB of data.
3 . Volume-Based Discount
Definition: The size of the discount increases as the purchase volume increases.
Example:
5% for 100-500 minutes,
10% for 500-1,000 minutes,
20% for above 1,000 minutes.
4 . Time Frame-Based Discounts
Definition: Applied only during certain periods (e.g. off-peak hours).
Example: 50% discount on calls made between 11 PM – 6 AM.
5 . Promotional Discounts
Definition: Temporary offers for marketing or launching purposes.
Example: First 3 months free or new subscribers get a 25% discount.
6 . Bundled Discount
Definition: Discount for subscribing to multiple services together.
Example: $5 off while subscribing for broadband and mobile services.
7 . Loyalty Discount
Definition: Offered to the customers for a long-term association or high ARPU (average revenue per user).
Example: 10% after 12 months of service.
How Are Discounts Configured in Billing Systems?
Telecom billing systems offer discount configuration features based on:
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- Customer eligibility criteria such as type, service usage, and geography
- Time windows such as a specific date range, daily and weekly time bands
- Event types such as voice, SMS, data, roaming, etc.
- Discount priority and order in cases of multiple discounts applying
A discount rule engine takes care of the work, applying complex logic to determine:
➡️ What discount applies?
➡️ When does it apply?
➡️ How is the discount calculated?
Example of a Discount Rule Engine
| Rule Name | Criteria | Discount |
|---|---|---|
| Loyalty_12M | Customer tenure >12 months | 10% on the total bill |
| Night_Calling_Offer | Time 11 PM–6 AM | 50% on-call charges |
| Promo_NewUser25 | New customer less than 3 months | 25% on a postpaid plan |
| Bundle_InternetMobile | Both broadband and mobile subscribers | $10 off |
Additional Considerations
➡️ Management Controls: It may be necessary to handle overlapping discounts.
➡️ Tax Calculation: Is the discount taken before or after tax?
➡️ Regulatory Limits: Some regions have laws requiring minimum prices even when those prices are discounted.
➡️ Reporting: Discounting should be written into the bill and reports and thus made transparent
How Discounting Shows up on Customer Bills
| Monthly Rental | $55 |
| Internet Bundle Discount | -$10 |
| Night Calling Discount | -$7 |
| Total Payable | $38 |