13 Creating Subscription Terms
Learn how to create subscription terms and add them to your packages and bundles in Oracle Communications Billing and Revenue Management (BRM). Subscription terms define the commitment periods and options for canceling and renewing the services you offer.
Topics in this document:
About Subscription Terms
Note:
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Subscription terms are supported only by BRM 12.0.0.3.0 with Interim Patch 31426340 and later, and PDC 12.0.0.3.0 with Interim Patch 31426374 and later.
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Subscription terms work end-to-end only when Appliance Standards Codification (ASC) 606 is enabled in BRM. See "Enabling Deliverable-Based Revenue Recognition" in BRM Collecting General Ledger Data.
Subscription terms specify a contract's commitment period, such as 1 month, 1 year, or 2 years.
Terms also specify whether customers:
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Can cancel their contract before the commitment period ends
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Are charged an early termination fee for canceling early
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Have a grace period, during which the early termination fee is waived
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Have their contracts renewed automatically when the commitment period ends
For example, a term might specify a 1-year commitment period, allow early cancellation with a $250 early termination fee, and renew automatically with the same terms.
BRM includes standard terms that you can use for your contracts or use as examples when creating your own terms.
After you create subscription terms, you can associate them with your packages and bundles.
About Early Termination Fees
You can charge your customers an early termination fee if they cancel their contract early. You can use this fee to recoup the cost of equipment or discounts given to customers at the start of a contract. For example, you could use it to recoup the cost of a cell phone that was provided for free with a wireless service contract.
An early termination fee can be one of these:
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A flat fee, such as 100 US dollars or 75 euros.
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A fee that is reduced in equal amounts over the contract's term. For example, in a 1-year commitment period with an early termination fee of $60, you could reduce the fee by $5 each month. A customer canceling after 1 month would pay $55, and a customer canceling after 8 months would pay $20.
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The balance remaining in the customer's contract. For example, in a 1-year commitment period with a $50 monthly charge, you would charge $50 for each month remaining in the contract. A customer canceling with 5 months remaining would pay $250, and a customer canceling with 3 months remaining would pay $150.
You can also add a grace period, allowing your customers to cancel a contract within the first few days or weeks after purchase without incurring the early termination fee.
About Automatic Renewals
You can set contracts to renew automatically at the end of the commitment period with the same terms or with different terms. For example, you can create a subscription term that automatically renews with the same 1-year commitment or with a different monthly commitment.
When a contract is renewed, time-based discounts, such as a first-year discount, aren't renewed. Time-based discounts that exceed the contract commitment period, such as a two-year discount, are still in effect, but the end date for the discount remains the same.
Your customers can renew their contracts manually at any time, regardless of the commitment period, through your service representative or your customer care application.
About Bundle Terms and Package Terms
After you create subscription terms, you can associate them with your packages and bundles. A package's terms apply to all required bundles in the package, but any optional bundles are governed by their own, independent terms.
For example, assume you have a package that has a $20 early termination fee. That package includes a required bundle for digital textbooks and an optional bundle for online tutoring. If a customer cancels the digital textbook service after the first month, they must pay the $20 fee and the entire package is canceled, including the online tutoring service. But the terms for the online tutoring service might let the customer cancel it at any time without paying an early termination fee or canceling the rest of the package.
About Obsoleting Subscription Terms
Note:
When a package is obsoleted, it does not obsolete the term that is associated with it. You must obsolete the subscription term separately.
When you obsolete a subscription term, it does not impact your customers' existing contracts. Those contracts continue to be governed by the same terms. Your new product offerings, however, can no longer include the obsoleted term.
You cannot obsolete a subscription term when:
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A package and the bundles associated with the package all use the same subscription term. Before you can obsolete the term, you must change the package and its bundles to use a different subscription term.
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The term is set to automatically renew at the end of its commitment period. Before you can obsolete the term, you must change its auto-renew setting to No.
Creating Subscription Terms
When creating terms, you specify the following:
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The commitment period.
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Whether to allow early cancellation of the contract and whether to apply an early termination fee:
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Allowed, No Penalty: Contracts can be canceled early, and customers will not be charged an early termination fee.
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Allowed, with Penalty: Contracts can be canceled early, but customers will be charged an early termination fee for doing so.
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Not Allowed: Contracts cannot be canceled early.
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If applying an early termination fee, whether to apply a flat fee, a fee that reduces over time, or the remaining contract balance. You can also specify:
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Whether to add a grace period during which no early termination fee is applied.
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The revenue general ledger ID to associate with the early termination fee. If you do not select a general ledger ID, the early termination fee is distributed across the deliverables in the contract.
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Select whether to automatically renew the contract, and which terms to renew with.
After you have created terms, they can be associated with your packages and bundles.
Figure 13-1 shows a sample subscription term that has a 1-year commitment period, allows early cancellation with a $240 early termination fee that reduces by $20 each month, has a 10-day grace period, and renews automatically with the same terms.
Figure 13-1 Early Termination Fee Settings in PDC
