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

• About Penalty Fees

• About Automatic Renewals

• About Bundle Terms and Package Terms

• About Obsoleting Subscription Terms

• Creating Subscription Terms

About Subscription Terms

Subscription terms specify a contract's commitment period, such as 1 month, 1 year, or 2 years.

Terms also specify whether customers:

• Can cancel their contract before the commitment period ends

• Are charged a penalty for canceling early, such as an early termination fee or the contract balance

• Have a grace period, during which the penalty is waived

• Have their contracts renewed automatically when the commitment period ends

• (Release 15.0.1 or later) Have a minimum contract period before cancellation is permitted

For example, a term might specify a 1-year commitment period, a minimum contract length of 4 months, allow early cancellation with a $250 early termination fee, and renew automatically with the same terms.

After you create subscription terms, you can associate them with your packages and bundles.

About Penalty Fees

You can charge your customers a penalty 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, recoup the cost of a cell phone that was provided for free with a wireless service subscription.

The penalty fee can consist of an early termination fee, the remaining contract balance, or both. Table 13-1 describes the types of charges you can apply.

Note:

Applying both an early termination fee and the remaining contract balance is supported in 15.0.1 or later releases. In 15.0, the penalty fee is either an early termination fee or the remaining contract balance.

Table 13-1 Charge Types for Early Cancellation

Charge Type	Description
Early Termination Fee	The fee can be either: A flat fee, such as 100 US dollars or 75 euros. 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.
Contract Balance	The contract balance can be either: The full contract's remaining balance. For example, assume a subscription term has a 1-year commitment period with a $50 monthly charge. Customers would be charged $50 for each month remaining in the 12-month contract. A customer canceling after 7 months would pay $250, and a customer canceling after 9 months would pay $150. (Release 15.0.1 or later) The remaining balance for a specified minimum contract length. For example, assume a subscription term has a 1-year commitment period, a minimum contract length of 4 months, and a $50 monthly fee. Customers would be charged $50 for each month remaining in the 4-month minimum contract length. A customer canceling after 1 month would pay $150, and a customer canceling after 3 months would pay $50. A customer canceling after 6 months would pay $0 because they already paid the 4-month minimum.

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 a penalty fee.

About Automatic Renewals

You can set contracts to automatically renew at the end of the commitment period with the same or different terms. For example, you can create a subscription term that automatically renews with the same one-year commitment or with a different monthly commitment.

Time-based discounts, such as a first-year discount, aren't renewed when a contract is 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 manually renew their contracts before they expire, 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:

• 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.

• 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

You can create subscription terms using:

• The PDC UI. See "Subscription Terms" in PDC Online Help.

• The ImportExportPricing utility with an XML file. For information about the XML tags used to configure subscription terms, see the PDC_home/apps/Samples/Examples/Sample_SubscriptionTerms.xml file and "Subscription Terms".

When creating terms, you specify the following:

• The commitment period.

• Whether to allow early cancellation of the contract and whether to apply a penalty fee:

  • Allowed, No Penalty: Contracts can be canceled early, and customers will not be charged a penalty.

  • Allowed, with Penalty: Contracts can be canceled early, but customers will be charged a penalty fee for doing so.

  • Not Allowed: Contracts cannot be canceled early.

• If applying a penalty for early cancellation, whether to apply an early termination fee, the contract balance, or both.

  • If applying an early termination fee, whether it's a flat fee or a fee that reduces over time.

  • If applying the contract balance, whether to apply the remaining balance up to the full commitment period or up to a minimum contract length.

  You can also specify:

  • Whether to add a grace period during which no penalty is applied.

  • 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. This applies only if you use deliverable-based revenue recognition.

• Whether to automatically renew the contract, and which terms to renew with.

• (Release 15.0.1 or later) The minimum contract period before cancellation is permitted.

After you have created terms, they can be associated with your packages and bundles.

Figure 12-1 shows how to use the PDC UI to create a sample subscription term that has a 12-month commitment period, allows early cancellation with a $120 early termination fee that reduces by $10 each month, has a 5-day grace period, and does not renew automatically. The minimum contract period before cancellation is permitted is 3 months.

Figure 13-1 Early Termination Fee Settings in PDC