 | Issue: | Europe II 2002 |
| Article no.: | 6 | |
| Topic: | Reduce Cost With Prepaid Roaming | |
| Author: | Christian Giroux | |
| Title: | Product Manager | |
| Organisation: | Sicap Ltd | |
| PDF size: | 20KB |
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Article abstract
Prepaid Roaming is a high margin GSM service and, being paid for in advance, minimises fraud. Unfortunately, most pre-paid roaming is complicated to use. CAMEL, a GSM standard – an adaptation of Intelligent Networks – overcomes the usability problem. Intelligent Networks enable quick implementation of services by moving the logic from thousands of switches to a reasonable number of new nodes called SCPs. Full implementation is expensive, but existing equipment can be adapted to provide limited CAMEL functionality more cheaply.
Full Article
Prepaid Roaming is one of the highest margin services for a GSM operator. Up to now, the most popular mechanism to enable this service has been Unstructured Supplementary Services Data (USSD) call-back. However, this method has important drawbacks, especially regarding ease-of-use by the subscribers. CAMEL, the GSM adaptation of Intelligent Networks, has now been rolled-out in most networks and largely overcomes the usability problem. Prepaid Roaming The majority of subscribers are prepaid, and despite efforts by operators to convert them to post-paid accounts, business analysts believe this situation will prevail for the foreseeable future. Prepaid subscribers expect their phone to work wherever they go. Different studies have shown that 50 to 80 percent of them would like international roaming service, and that, depending on their country of origin, 5 to 15 percent do actively use their phone while travelling. From an operator’s point of view, this customer segment represents an excellent opportunity to increase the average return per user – ARPU. The payback on the investment for the equipment to enable prepaid roaming is very quick, often less than a year. Generally, the bigger the subscriber base, the faster break-even is achieved. Prepaid roaming, is also a means to minimise fraud since roaming charges, at least for voice, are deducted in real-time from the subscriber’s balance. Unpaid roaming bills are virtually nonexistent except for the small exposure for originating SMS (short messaging) due to hot billing. Prepaid Roaming Mechanisms Three different mechanisms are used by GSM operators worldwide for prepaid roaming: Contract Roaming Many operators, notably in France, ask their prepaid subscribers to register before they roam in other countries. This has two advantages: the subscribers can use their phone the same way they do at home, and the operator gets to know who their own customers are and improve their relationship with them. On the other hand, this means that subscribers who wish to remain anonymous will not be able to access to the roaming service. They might, though, if they leave for an extended period of time or visit the same country repeatedly, buy a prepaid card from the visited network. This results in lost revenues for the home operator. Call Back Roaming This is currently the most widely deployed method to offer a prepaid roaming service. The subscriber, while away in another country, orders a service node located his home network – by keying in a string of characters following the USSD standard – to call him back and then connect the called party. For example, a subscriber will dial * 111 * +41 31 1234567 #. His handset then rings, and he hears an announcement telling him to wait while the other party is being connected. The system then proceeds to do so. Often, the Call Back Roaming systems also have a feature to announce to the caller the maximum authorised duration of the call based. This is calculated based on the credit balance in the caller’s prepaid account, and the physical location of both parties involved in the call. A call is disconnected when its duration reaches the maximum authorised. CAMEL Roaming With CAMEL, an adaptation of the Intelligent Network standards for GSM, the network implements the logic and protocols to enable prepaid roaming. The call is monitored and controlled by a node in the home network, which communicates with the visited network. When one of the parties hangs up ending the call, the proper amount is debited from the prepaid account. If one of the parties’ balance reaches zero, the call is automatically disconnected, normally after playing a tone. CAMEL deployment is progressing quickly, enabling roaming between more and more networks. What is CAMEL? Intelligent Networks, or IN for short, were first implemented by Telcordia (then Bellcore) during the 80’s, and successfully put in general service in 1990. The first service it supported was routing of the 800 numbers. IN enables quick implementation of value-added services by moving the required logic from thousands of switches to a reasonable number of new nodes called Service Control Points (SCP) by communicating with the network through a new protocol called INAP. Before the introduction of IN, the creation or modification of a service involved updating all the switches in a network – an enormous effort. Changes are now made only to the SCPs in the network. An adaptation of Intelligent Networks for GSM was required to allow prepaid subscribers to roam seamlessly in other networks. The latest versions permit real-time charging of a wide range of services both at home and away. Currently, CAMEL has been deployed in virtually all the countries in Western Europe; as a rule most operators are still using its earlier versions Roaming with CAMEL CAMEL prepaid roaming is increasingly available. The alternatives to automatic CAMEL prepaid roaming require the customer to remember long strings of digits and a somewhat confusing set of procedures. CAMEL, by contrast, permits subscribers to simply dial as they would at home. This ease-of-use has stimulated the usage of prepaid roaming. As the industry expected, prepaid roaming proved to be the killer application for CAMEL. CAMEL Roaming vs. Call Back CAMEL is more user-friendly than the call-back system. An operator can even offer complex discount schemes, based on a variety of factors that can be applied in real-time even when the user is roaming abroad. For multi-network operators, Camel permits an international branding strategy providing seamless voice roaming in all of their own networks. This, however, requires expensive network upgrades and testing of all the co-operating CAMEL networks and smaller operators may have problems re-negotiating their roaming agreements to include CAMEL. On the other hand, call-back mechanisms work virtually everywhere without requiring extensive testing or re-opening of the roaming agreements. Typically, an operator earns more margin per call minute with call-back, as the settlement agreements mostly favour the home network for calls to their roamers as opposed to calls in the other direction. USSD call-back is less user-friendly and some operators have blocked it. In these cases, SMS (Short Message Service) rather than USSD can be used to initiate the call. This, though, is just one more complication for the user. Call-backs also require greater resource usage as calls are always routed through the home network. Deploying CAMEL Introducing CAMEL in a network is costly. The software in all the core networks nodes need to be upgraded, and new SCP nodes must be added. SCPs typically cost between 5 to 8 Euros per subscriber for a subscriber base of 3 million or more depending upon the range of functions to be implemented. The cost of integrating the equipment into the existing network and the costs of testing and implementing the new functions can be steep. Finally, a wide range of operational and network maintenance personnel needs to be retrained to implement and use the new equipment and systems. Reducing the cost Complete migration of existing prepaid system is not the operator’s only alternative. In order to reduce the cost, it is possible to “CAMEL-enable” existing legacy equipment by adding an external interface to “translate” CAMEL system messages. The prepaid billing system will then appear to be a Service Control Point (SCP) to the rest of the network. This strategy avoids a major SCP investment. It relies on the availability of a node to handle all the network’s CAMEL messages for prepaid service both for home and roaming calls. To keep the costs as low as possible, all the features required of an SCP by the Intelligent Network standards should not be implemented. A node with such limited functionality can be obtained for 2 to 3 Euros per subscriber – a third of what a full function system would cost. Conclusion By installing such equipment, the operator can also avoid massive retraining of the customer care personnel, since the database containing the information they need to serve the subscriber is only slightly modified. Nevertheless, the same investment will still be needed to update the Home Location Registers and the Mobile Switching Centres in the network as will the interoperability testing costs.
