Home Latin America 2007 Convergent charging – unlocking value

Convergent charging – unlocking value

by david.nunes
Jarmo NiemiIssue:Latin America 2007
Article no.:20
Topic:Convergent charging – unlocking value
Author:Jarmo Niemi
Title:President and CEO
PDF size:188KB

About author

Jarmo Niemi is the President and CEO of Tecnomen. Prior to joining Tecnomen Mr Niemi was the President of Aspocomp Group Corporation. Previously, he held various management positions at Orion Corporation and Aspo Corporation. He is also a Board Member of QPR Software Corporation. Mr Niemi holds a Master of Science degree in Engineering from Helsinki University of Technology.

Article abstract

Converging networks and services require solutions for problems that legacy systems never had to deal with. Legacy networks each handled one type of traffic and their administrative systems handled one kind of business. Internet Protocol-based convergent networks changed that. Now voice, data, text – anything that can be digitalised use the same network and the services can be combined. Convergent charging systems give operators the flexibility to use a single system to charge for any combination of services on these networks.

Full Article

The term convergence is defined by the Merriam-Webster dictionary as: ìthe merging of distinct technologies, industries, or devices into a unified wholeî. Ipso facto, a convergent charging solution could be viewed as the ability to charge in real-time for the full universe of converged services. The technologies, industries and devices, networks, services and payment methodologies of todayís operators are converging. The changes in this converged telecommunications industry are occurring at such a pace that the landscape of today bears no resemblance to that of five years ago. Yet, in the midst of all this change, there are some constants – in order to survive and grow, mobile operators need to be able to quickly offer unique and exciting services, as well as be flexible enough to easily charge for these services. Harnessing change In the past, a mobile operatorís route to growth and profitability was simply adding new subscribers. While this may still be the case in emerging markets, more mature markets, some at nearly 100 per cent penetration, need to take a different route – increasing ARPU, average revenue per user, while reducing churn. This involves freeing the spending potential of subscribers, both prepaid and post-paid, by increasing their uptake of next-generation services while minimising the impact of churn. For example, mobile operators could seek to develop the synergies between prepaid and post-paid subscribers with the introduction of hybrid (mixed) accounts. Additionally, operators could segment their subscribers, based not on their payment method, but possibly based on the services they use, personal interests, spending patterns or other relevant information. As many new services come from third-party mobile data-related products, an operatorís value chain is lengthening as it builds links to outside service providers. Therefore, it is important for operators to position themselves in such a way as to retain ownership of the customer and reap the benefits of the wide range of value-added services provided. This new business model requires a convergent charging solution that can manage this new dynamic and position the operator favourably. In addition, mobile and fixed-line operators, Internet service providers, ISPs, and cable companies are all crossing what used to be clearly defined business demarcation lines leading to a new wave of business opportunities and converged offerings. For example, as mobile broadband speeds improve, mobile operators are quickly tapping into new revenue streams by embracing media brands that would be more associated with the fixed line Internet markets of yesterday than the mobile ones of today. Multi-play service offerings are sprouting up across the globe allowing bundling of integrated services, for example, broadband, IPTV, voice and mobile services into single converged packages to which a consumer may subscribe. What does the future hold in store? What impact, if any, will the arrival of WiFi, WiMAX and wireless VoIP have on mobile operatorsí markets into the future? Only time will tell, but we can clearly see, as convergence and convergent charging gains more and more industry momentum, operators must be prepared to seize opportunities as they arise. Revenues and the back office Let us draw an analogy between a locked door and what a real-time convergent charging solution should support. Subscribers – their account types – are the key to the door. If the key fits, i.e. the balance is in credit, the credit limit has not been exceeded and access to the specific service is allowed, then the locks are released and the doors opened, thereby allowing subscribers to utilise the service. Proactive monitoring of the balance or credit limit occurs in real-time to ensure that the appropriate doors are open. A secure online convergent charging solution must seamlessly enable charging for the merged legacy circuit and packet switched networks, both fixed and mobile. It must also handle the associated SS7 IN-based solutions, SIP and Diameter-based all IP-based next-generation networks, NGN, and IMS environments. Convergent charging solutions must allow prepaid, post-paid and hybrid accounts not only to exist together but to compliement one another; it must also provide real-time monitoring and session control for these accounts. Most important, a convergent charging solution must rate and charge in real-time all of todayís voice, data, content and other services. It must also be highly scalable, efficient and flexible so operators can develop, offer and charge for new innovative services faster than their competitors. At the same time, a convergent charging solution must quickly evolve to meet the charging requirements of new network elements, applications and services. Real-time authorisation and balance management A convergent charging solution should contain two of the main features of an Intelligent Network, IN, based prepaid system: 1) authorisation and access control; and, 2) real-time balance management /credit limit control. The location of IN-based solutions ëcloseí to the core network makes the efficient real-time control of these parameters possible. Real-time balance management and access controls were never requirements for post-paid solutions as all of the processing took place offline after the event. Nor were they part of ëhot billingí, near real-time or mediation-based solutions. The rapidly changing market and the growing number of new data and content-related services from third-party suppliers, make real-time charging functions increasingly important to reduce fraud and strengthen revenue assurance. Consolidation and expense reduction By and large, operators currently have multiple, parallel charging systems and data silos based on the legacy ëstove-pipeí type developments of the past. Simply put, convergent charging streamlines your system architecture, creates operational efficiencies, ultimately improving profitability. From an architectural perspective, having a single charging solution for all bearer systems, services and subscribers, not only reduces the number of systems and their associated complexity but it also allows for the development of a uniform user-experience, such as, for example, converged account facilities. In addition, a single solution, based on an open-architecture design, incorporating standards-based interfaces and published Application Programme Interfaces, APIs, enables seamless integration with virtually any vendor system, or network service application, at a fraction of the cost involved in achieving this with legacy stove-pipe solutions. Controlling all system configuration, monitoring and customer care activities from a single point creates operational efficiencies and reduces the likelihood of human error. This approach also reduces the time it takes to introduce new services to the market – an essential requirement given the fickle nature of todayís discerning subscriber. It enables simultaneous service utilisation, for example, a voice call and MP3 download, and supports both multiple account balances and reservation management functions, since all subscriber financial information is stored in a single repository. Additionally, a single source solution improves both future hardware and software upgrade paths. Enhancing user-experience Not only mobile operators benefit from convergent charging solutions – their subscribers do as well. The following examples illustrate some of the benefits subscribers can enjoy from a convergent charging solution implementation. A convergent charging solution can open up all the services an operator has to its entire subscriber base, irrespective of their method of payment. These charging solutions can also provide family- or business- based account modes incorporating greater spending controls. A family account, for example, can be used with both prepaid and post-paid hierarchical models; a pre-defined prepaid value is inserted into the family account balance at the start of each month. The prepaid value is used for all data and content services, while voice-related calls are handled on a post-paid basis. This valuable cost control solution guarantees that children will always be able to make a voice call, while at the same time saving parents from the risk of data- and content- related service ëbill-shockí at the end of each month. Convergent charging supports the ability to quickly create dynamic and flexible offerings that can be selectively bundled together for sale. In many markets bundling of voice, SMS, MMS, IPTV, etc. appears to be the preferred way for subscribers to purchase services. It also lets operators award real-time rewards, bonuses and discounts to differentiate their service, enrich the userís experience and reduce churn. In this fast-paced environment, with increasing customer awareness, mobile operators need to ensure that they can reap the benefits of opportunities as they present themselves. Real-time convergent charging solutions are ready today to handle the requirements of tomorrow.

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