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Convergent Charging and Billing
Challenges and Solutions
Convergent Charging and Billing Overview
Convergence is increasingly relevant and important for operators in a number of areas. Network convergence, vendor and technology convergence, as well as converged billing and charging systems.
Convergence in the area of charging and billing is being driven by the need to unify service offerings to all subscribers, regardless of their payment method. In the converging telecom market, simple segmentation of subscribers by method of access (wireless vs. wireline), method of payment (prepaid vs. postpaid) or type of service (voice vs. data), is not relevant anymore. Today, to increase subscriber loyalty and win new customers different services have to be bundled to create interesting market offerings like triple and quad-play with attractive, often flat-rate, charging plans.
In this context, maintaining separate charging and billing systems for different classes of subscribers and services is not justified. To stay competitive, telecom operators and service providers are investing in convergent charging and billing solutions with deployment flexibility, business flexibility and low CAPEX and OPEX.
To meet operators’ and service providers’ growing demands, many vendors have started to offer solutions enabling converged prepaid, postpaid and hybrid pricing with multi-account enterprise and family plans and flexible payments schemas. They also enable unified billing for multiple service types, and single billing for continuous services using multiple devices. Furthermore operators have to manage, deploy and withdraw services efficiently and cost-effectively. Services parameters have to be adapted swiftly to meet time-to-market demands. Just as importantly, operators need solutions that relieve subscribers of confusing and complex pricing structures that can become a block to new service use and adoption.
Converged Charging and Billing Definition and Evolution
The traditional model
Typically, in traditional fixed and mobile networks, the billing systems are tightly coupled with the services. Each service is billed independently of any others, creating inefficiency and wasted opportunities in service information and data sharing.
Prepaid services have traditionally been developed in the IN. Whereas postpaid services entail a separate charging data record (CDR) which is handed off to an offline billing system for batch processing. Time delays between account balance mediation, rating and debiting are significant. And roaming latency is even more marked.
Migration towards convergent charging
A majority of operators around the world, have begun migration towards convergent charging and billing by merging prepaid and postpaid systems. First, the charging and accounting functions are divorced from session and service control. Account information is centralized into one system, allowing new and flexible mixing of pre and postpaid balances for the same subscriber accounts.
Realtime rating and charging
An important key component of evolving convergent charging systems is ability to control services in realtime. For example, prior to the service being delivered to the subscriber, a realtime system must be able to authenticate the user and verify the account balance. While the service is being consumed, realtime rating and charging platforms should be able to monitor usage. This allows operators to set account balance thresholds, implement warnings or terminate services. It also enables operators to significantly enhance revenue leakage control and malicious service usage. Moreover, by monitoring the service usage in the real time, operators are able to use the whole spectrum of special service offers and advertisments to stimulate usage and encourage users to subscribe to new services.
Key Characteristics - what does ‘real’ convergence entail
As a concept, converged billing and charging has a history of over ten years of more. However, it does not yet have a precise definition. Convergence sometimes refers to consolidation across services, capable of rating voice, video and data transactions. It has also been used to refer to a single system designed to manage both an operator’s consumer and business subscribers.
Today, the definition includes payment-type convergence, namely the combination of prepaid and postpaid services in one subscriber. Going forward, the consensus view is that ‘real’ convergence will include all of these definitions. Practically speaking convergence should be couched in the level of innovative benefits it delivers to the operator. The definition should include service types, consumer/business and payment convergence. It should also include: marketing flexibility and perhaps even end-user personalization of offers and services.
To achieve this, state-of-the-art converged billing and charging platforms should enable access to complete, real-time subscriber information customer; offer interactive customer experience, as well as efficient system management.
Real convergence also implies that a single data model is used throughout the system. Data should be easily shared without the need for mapping and the data model must be robust enough to accommodate any service, network or payment type. It should also be able to handle new requirements as they emerge.
A converged solution must be capable of operating in real-time and be network-grade. Latency impacting call completion or session response is unacceptable, and seamless scaling is required for transaction processing, customer management.
Finally the ideal converged solution should also operate regionally and globally, but retain a centralized configuration that allows deployment consistency across the operators’ business.
Convergent Charging and Billing Market Overview
Market Drivers and Challenges
Operators world-wide are finding their businesses negatively impacted by legacy systems containing a multiplicity of technologies and repositories of customer information. When new services are added, operators must patch systems together to try to support business evolution. This piecemeal approach has led to inefficient complexity, lack of flexibility, slow time-to-market, and poor customer responsiveness.
Legacy systems can not easily handle the new charging models that are required for new services. As a result, ad hoc, expensive and time-consuming customizations are undertaken. The situation is even worse when subsequent changes are required. Furthermore with a multiplicity of systems in place, operators hardly ever have anything like a real-time view of customer activity. Typically the same ‘user’ exists in many silos, thus it is impossible to bring one individual into focus.
Today, however the operators’ user base demands seamless billing and service delivery. Operators who have migrated their systems away from the legacy environment towards converged billing, now have a distinct competitive edge over their rivals who have not yet made the transition.
Relationship with the Customer
One of the key market drivers, is not simply the availability of better technology, but the need to build better and stronger relationships with users and customers. Real-time converged systems provide customers with an optimum experience, and increased control and flexibility.
A single, consistent source of customer data means that customer self-service is easier to implement and a consistent experience results in higher customer satisfaction. Seamless, real-time, self-service experience for customers has become crucial in the emerging competitive landscape and a key market driver.
Analysis of convergent charging and billing solutions
The most difficult type of convergence to deliver is payment type convergence, primarily because of the differences between network and IT requirements. Typically payment type convergence is delivered by integrating separate off-line postpaid capabilities with in-network prepaid systems. On-site integration ensures that the two systems feed a common customer care solution. However, essentially because operation and administration are still separate, such converged billing implementations provide limited operational benefits. As a result a business case is difficult to justify.
Integrating off-line postpaid capabilities with in-network prepaid billing as a package, provides a better business case and means that is is possible to market hybrid offers containing prepaid and postpaid elements. Such solutions have allowed greenfield operators to quickly launch new services and improve market share against competitors. However, this level of convergence still entails the operation of two distinct systems. There is also the problem of real incompatibility between products, as well as multiple data models and terminologies.
Standards-based convergence
Standards-based payment type convergence still requires the integration of separate prepaid and postpaid solutions. However, additional components such as middleware solution and CRM application are included. The idea, is that the standards-based middleware assures that applications work together, rather than pre-integrating distinct applications. However, such models have yet to deliver the true benefits promised by convergence. And the business models are not yet really justified.
Inflexible Legacy Systems
Legacy systems that cannot deliver business agility are a major inhibitor of convergence. As a result operators of all sizes are starting to focus on the value proposition behind convergent services.
The challenge is to achieve the goal of being a one-stop shop for multiple services, delivering voice, data, video, and Internet access over wireline, wireless, DSL, cable, and dial-up. And to offer convergent payment options to customers.
Towards a completely unified technology
It is now clear that a unified technology and infrastructure is needed to handle both prepaid and postpaid billing. This entails one distinct data model spanning all system components. There should be no difference between real-time transactions, such as pre-paid, or offline postpaid transactions.
Such a unified system provides operators with an asset that improves operational efficiency and business competitiveness. It should deliver streamlined operations across customer management, ordering, rating and balance management. And there should be a complete, up-to-date view of customers at all times, with the same data shared across the system.
Convergent charging and billing - market stakeholders
Market uptake
Convergent charging and billing has seen greatest initial demand in developing countries and emerging markets, such as South East Asia, the Middle East and Africa. In comparison, tier one players in mature markets, are constrained and hampered by the problems of legacy infrastructure. However, leading MNOs and service providers in the mature markets have also started to invest in the real-time charging and convergent charging and billing solutions.
Converged solutions have been of greatest immediate benefit for operators with a high percentage of prepaid users. They allow the full range of the operators’ services available to the prepaid base. This means the full potential of prepaid users can be exploited for the benefit of the operator’s bottom line.
In North America to date there has been relatively little demand for converged solutions. This is because pre-paid usage is low and the market is dominated by post-paid voice and flat-rate data plans. Furthermore, the pre-paid market is populated by low-ARPU voice subscribers. In the future, greater choice in data services, may contribute to greater demand.
In EMEA by contrast there has been and will continue to be greater demand for converged solutions. This demand is driven by high subscriber growth in Eastern Europe, Middle East and Africa and the expected expansion of value added services in Western Europe.
Solution Vendors
Vendor offerings in the Converged Real Time Charging and Billing space, include amongst others: traditional IT offline billing vendors like Amdocs, Convergys and Intec; major network equipment vendors pursue the market by partnering (Alcatel-Lucent), developing their own products (Huawei and ZTE) or acquisition (LHS by Ericsson). Other major players include Oracle (after acquiring Portal), Comverse, Telcordia, as well as vendors like Openet, eServGlobal and HP IUM, Highdeal, Open Cloud and Sitronics, Kabira and Redknee, LogicaCMG and others. A listing of key vendors and their products follows in the final section of this Operator Guide.
Next Generation Charging and Next Generation OSS
3GPPR6 has defined an online charging system (OCS) in the IMS architecture. OCS supports multiple charging modes such as content charging, traffic charging or volume charging for both voice, data and value-added services. The OCS interacts with the service control layer through Diameter Credit Control protocol and provides prepaid rating and realtime control of services for various account types and management requirements. It spans the PSTN, PHS, 3G, IMS, WLAN and broadband IP-based networks.
Converged charging systems still need to be integrated into the backend OSS/BSS, as well as customer care and self-provisioning systems. It is likely that traditional BSS will evolve towards Next Generation OSS (NGOSS). This will include service management, business intelligence, marketing CRM and QoS, as well as content management systems.
Towards integration with the SDP
Going forward, realtime convergent charging platforms will merge with service delivery platforms, to provide operators with a more efficient and cost-effective consolidated platform to drive new service and revenues.
This will include integration with Web 2.0 and Internet based data services which in turn will allow a far reaching transformation of operators’ networks and business potential. Many operators and service providers are beginning to regard convergent charging solutions either as a key enabler of their SDP infrastructure, or indeed as a SDP in its own right.