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7/29/2019 Symsoft whitepaper 1202_OCS_WP.pdf
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White paper
March 2012
www.symsot.com
reaLiZiNG CONVerGeNt CharGiNG
Ex ploiting business opportunit ies with
online charging
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exeCutiVe summary
As mobile technology development and customer expectations orge ahead, service operators recognize
the need to uniy service oerings to all subscribers, regardless o their payment method. In the converging
telecoms market, simple segmentation o subscribers by method o payment (prepaid vs. postpaid) or type o
service (voice vs. data), is no longer relevant. Today, operators must have the ability to bundle and promote
diverse services to create interesting market oerings that target more specic market segments. High-
value premium and roaming services also increase the need or continuous control o subscriber spending
to decrease credit risk and increase customer satisaction. Finally, operators need to reduce operating costs
caused by billing complexity and improve their ability to deploy and withdraw new and existing services
eciently.
Such requirements highlight the problems inherent in the traditional charging and billing silo model, whereprepaid services are handled in the intelligent network (IN) and postpaid services are handled by call detail
records orwarded to a billing system or batch processing. Realizing convergence while maintaining these
silos is inelegant and costly, increasing time-to-market and making it harder to oer similar services to all
customers. In addition, time delays between account balance mediation, rating and debiting are signicant,
increasing the risk o revenue leakage.
Migration to real-time charging and rating or all services and subscribers, utilizing an online charging system
(OCS), is an attractive path or operators who wish to stay ahead o the competition. This places a number o
requirements on the OCS which operators must take into account when planning the architectural evolution
o their charging and billing environment:
Support or tight integration with network elements to allow or real-time control o service delivery
based on account balance and granted credit or all subscribers;
The ability to produce rated CDRs or urther processing in external systems such as billing systems and
data warehouse solutions;
Well-dened interaces enabling an external product catalog to control business rules in the OCS;
Standards-compliant interaces that accept rating requests rom external systems or sessions and events
with dierent parameters, enabling re-rating.
With rapid world-wide uptake o convergent charging models in the maturing mobile market, the race is
on or operators to select the best-o-breed or charging and billing to create unied technical solutions
that enable them to secure market share and quickly deploy new services. The winners will choose solution
providers that can ully integrate a highly congurable, fexible and scalable solution. Such providers allow
the operator to be condent o uture-proong and reliability, while enabling short time-to-market and an
increased fexibility to grasp new revenue opportunities.
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market treNds
While mobile technology continues to evolve at a relentless pace, mobile service operators need to be agile
i they are to tap into the revenue opportunities presented by existing and emerging services. Customers
now expect voice, data, video and music on one device. They want to make VoIP calls while downloading
messages. They want postpaid mobile service at work and prepaid during their ree time. They want to put
spending limits on their childrens mobile downloads. An operators ability to oer combined services on an
individual basis and charge accordingly becomes imperative or the competitiveness o the overall business.
This development puts new demands o operator processes and inrastructure. Operators need a single, real-
time convergent charging and billing process to handle all users and services in the same way, independent o
payment methods, such as prepaid, postpaid and hybrid models, service types (voice, video, data services, IP
telephony, etc.), network types (wireline, wireless), and regions [1].
This white paper discusses the importance o convergent charging in maturing mobile markets, the service-
driven changes in the architecture that are required to provide the needed fexibility and the online charging
capabilities needed to realize this architecture.
Shira Levine, directing analyst or next generation OSS and policy at Inonetics Research notes: Convergent
charging represents a way to support marketing initiatives like cross-sell, up-sell and service bundles (or
example, oering a discount on a data service based on video usage), in addition to the traditional benets o
reducing time-to-market or service rollouts and maintaining a more consistent customer experience across
payment methods, services and regions.
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5March 2012
It is clear that service providers in maturing mobile markets recognize that they can increase protability i
they attain the fexibility to deploy any service to any type o subscriber using any payment method with any
set o business rules [2]. Convergent charging solutions are predicted to increase in importance or operators,
with investments estimated to grow to $3.2 billion by 2015 (rom its $1.26 billion level in 2011) [3], as
demand increases or:
Short time-to-market to quickly respond to market needs and competitor initiatives;
A sustained drop in operating expenditure through reduced billing system complexity [4];
Integrated policy/charging solutions that enable operators to oer more fexible pricing models, such as
variable pricing based on time o day or the subscribers location [5];
Real-time capabilities to deliver promotions and notications to subscribers to stimulate usage [6];
The ability to serve specic market segments with targeted services, oers, bundles, innovative recharging
and targeted promotions, not only according to their ages, occupations and income but also according
to cultures, nationalities and behavioural patterns, etc. [7]. The operator can then accurately work out
dierentiated pricing policies based on customer segmentation;
Greater control o spending (rom customers and regulators) as the diversity o mobile services increase,
giving customers control over spending limits, avoiding bill shock and capping mechanisms through
SMS, data barring, notications, etc. with online charging or postpaid subscribers;
Machine-to-machine (M2M) transactions, such as between smart meters and utilities, and between
telematics devices and feet management systems. It is predicted that these will ar exceed human
transactions on the mobile network [5], and M2M customers will want to have automated real-time
control o service use;
Convergent charging solutions that support both the consumer market and enterprise services, such
as hybrid accounts or employees, revenue settlement or cloud services, and real-time management o
M2M transactions [5];
Support or Mobile money; enabling subscribers to use their cell phones to make payments, such as Oi
Brazil, which allows users to pay or small purchases rom their prepaid balance, and NTT DoCoMo in
Japan, which oers a mobile wallet service in conjunction with banks, where the mobile phone replaces
a subscribers existing credit card [5].
Though the convergent charging opportunity is primarily a wireless one, some wireline operators are
experimenting with multi-service convergence, including cable operators delivering quad-play with added
mobile capabilities, wireline broadband operators oering their IPTV subscribers access to prepaid video-
on-demand content, and xed line operators supporting their cloud strategies with convergent charging
capabilities [5].
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the Need fOr a NetWOrk
rethiNk
Traditionally, selling mobile services involved dierent technical solutions serving dierent customer
segments. Customers being billed or their service use (i.e. postpaid) have been handled in one set o
solutions handling batch billing, and customers that pay in advance (i.e. prepaid) have been charged in
intelligent network (IN) prepaid platorms. Several problems arise rom this:
When new services are launched (data services, IP telephony, mobile TV, mobile advertising, mobile
broadband, etc.), time-to-market increase as you have to integrate with dierent solutions or dierent
customer segments;
Combinations o dierent payment orms or a single subscriber becomes overly complex;
Certain customers (postpaid) cannot be given real-time control o their spending without installing
additional solutions;
Postpaid cannot be oered instant promotions based on their service usage;
Oers congured or customers with a prepaid credit orm are not available to customers with a
postpaid credit orm and vice versa;
The maintenance o several unique product catalogs increase the risk or tari inconsistencies and
associated revenue loss.
All in all, time-to-market is increased and the ability to oer services to all customers is curtailed by the
division o rating and charging into two distinct processes, based on credit orm:
Rates and account inormation or postpaid customers are managed by the billing system that charges
ater service use;
Inormation on prepaid customers is handled in the charging system that processes charges in an
online mode, i.e. maintains updated inormation on account balance and blocks service i no unds are
available.
I an oer is to be available to both customer segments, it has to be replicated in product catalogues in both
these systems.
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Figure 1 above shows how the evolution o billing and charging systems ollow the trend (let to right) rom
simple postpaid billing, through parallel billing/charging systems towards a consolidation o charging and
billing silos into a single, integrated process to support prepaid-postpaid, multi-play operations and all types
o subscribers.
In the ofine charging fow, the usage o network resources and services is reported ater the actual usage has
been perormed. Usage inormation is transerred rom the mobile network to a billing system or post-event
processing. The charges are then calculated and all charges are added to a single bill. Note that the charging
inormation generated or ofine charging does not aect the rendered service in real-time.
A notable drawback with ofine charging becomes apparent when services increase in price: while many
operators have solutions to implement credit limits in ofine systems, these operate with a certain time
lag. With roaming data priced in the range o 3-10/MB and data speeds reaching 0.5 MB/s on modern
smartphones, even a lag o just hal a minute can incur costs o 45-150 beyond the credit limit beore service
is blocked.
This is dierent or online charging: A subscriber account, managed by a corresponding online charging
system (OCS) is checked beore and during service usage to determine whether access to the desired network
resource(s) and services is granted or not. Thus an OCS is able to perorm real-time credit control. Its
unctionality includes transaction handling, rating, and real-time management o subscriber accounts and
balances.
Billing
Charging
Billing
OnlineCharging
BSS
(incl. CRM/ERP)
Charging
Billing
MSC MSC MSC GGSN ... MSC GGSN ...
Online
components
Offline
components
ERP/CRM
ERP/CRM
ERP/CRM
Figure 1. The evolution of bill ing and charging processes
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desiGNiNG CharGiNG aNd biLLiNG
fOr the futureOnce we recognize that each type o system has its own role to play, a more rational way to design the
charging inrastructure would be to let the online charging system handle rating or all service use, as it is
capable o providing real time bonuses, promotions, etc. as well as notications to customers to allow them to
control spending (see the right-hand model in Figure 1 above). The OCS can also contain the session control
layer, providing network and service elements that can notiy users and stop services when online charging
indicates that credit has been depleted.
In this model, the charging system exports rated CDRs to the billing system, and other Business Support
System (BSS) elements, or bill generation, Customer Relationship Management, Enterprise Resource
Planning and other business processes. Inormation such as subscriber account balance is also made available
to external systems using well-dened interaces.
Similarly, the BSS pushes out inormation rom its product catalogue and CRM elements to the OCS,
exporting oers and campaigns to the charging system along with inormation on which subscribers should
have which services.
In this architecture, there is no need to redesign existing processes and data models as new services are added
to the core layer. This move away rom silo-based to a hamburger-based model is consistent with many
other IT architecture models, is less hardware intensive and meets the increasing demands or multiple
business models, agility and time-to-market.
The centralization o rating and charging to a single OCS also allows a service provider to charge all
subscriber types in real time or all services. In this architecture, the OCS oers unied online charging and
online control capabilities and is used as a unied charging engine or all network services, making it a core
basis or convergent billing in the network.
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demaNds ON the ONLiNe CharGiNG
system (OCs)The novel architecture described above places new requirements on the OCS. As with traditional network
architectures, it requires robust real-time integration with network elements that deliver service to ensure that
service is blocked when spending exceeds credit limits or account balances.
Additionally, it requires a more comprehensive integration than has usually been the case with external
BSSs. Rated charging records must be produced or external billing systems to allow the creation o bills or
customers with postpaid services and other types o reporting.
As the central element or all rating and charging, the OCS must constantly have an updated view o taris
and other aspects o customer oers. To enable a centralized product catalogue or all customers regardless
o payment orms, it is necessary to provide the means or external systems to control business rules (oers,
campaigns, rates, bonuses) in the charging system.
With all rating being perormed by the OCS, it is also important that it provides the means or external
systems to send rating requests and receive an answer, giving a price or each request.
pOssibiLities With CONVerGeNt
CharGiNG
Solutions built on the principles described above will not only give operators the ability to support more
advanced and fexible payment models; they will also achieve shorter time-to-market and a more agile
product management, to increase their revenues.
With a simpler creation o products and campaigns or all customers, the time-line between the operator
marketing department and the subscribers is shortened. It is also easier to launch products that have been
successul in one segment towards others.
Recent research ound that the majority o tier-one mobile operators plan to integrate policy servers with
existing charging and billing systems [8]. By converging policy and charging unctions, policy decisions
can become more valuable to the operator and relevant to the customer. By blending inormation rom the
charging application about the subscribers pricing, balances, spending and preerences, more intelligent and
personalized policies can be created and deployed.
Entirely new services are also easier to launch, with a single integration or all customers instead o having
separate billing and charging systems to integrate or dierent segments.
Finally, tightly integrated product catalogue, charging and billing solutions decrease the risk o inconsistent
product denitions that can contribute to revenue leakage.
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symsOft the LOGiCaL partNer
fOr ONLiNe CharGiNG sOLutiONs
The most important criteria service providers cite or choosing a convergent charging supplier is product
reliability [9]. Symsot can oer 20 years o experience in charging solution products, combined with
comprehensive integration services, adapted to individual operator needs; all backed by installation &
commissioning, training and support programs to help operators secure the highest level o service reliability
and an uncompromised user experience. Our goal is to be a business partner you can rely on to provide end-to
end service rom initial consultancy to help you develop a tailored solution, through planning, operation and
evolution o your telecom business services.
The Symsot Online Charging System is a turn-key charging solution or all types o networks, services
and subscribers that is ully prepared or integration with external billing systems and centralized productcatalogues. As a unied system aimed at reducing the total cost o ownership (TCO), its core is a fexible rating
and charging engine that helps operators expand market share and reduce costs through personalized marketing
activities, and improve operational eciency. More importantly, it helps deliver a high level o QoS through
real-time service and hence ensure customer loyalty. In particular it can provide:
The ability to congure new price plans, services and products quickly;
Highly congurable business rules to ensure that requirements are met with minimum need or
customization;
Ease o integration with Mobile Network Operators (MNOs) and Mobile Virtual Network Enablers
(MVNEs) that enable Mobile Virtual Network Operators (MVNOs) to oer mobile network services;
High availability and scalability, pre-veried and lab tested.
PCRF capabilities or integrated policy management
From working with over 40 mobile operators world-wide, Symsot are acutely aware o trends and requirements
in the market, including the expanding need or enterprise messaging segment to ensure that our customers
stand ready to eciently grow their mobile services business.
We look orward to discussing how our Online Charging System can help your organization compete in a ast-
moving arena where we have seen that time-to-market is more crucial than ever.
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refereNCes
[1] Managing the Operational Transormation Imperative: A Pragmatic Approach to Strategic Operational
Change. Report, underwritten by TEOCO, June 2011.
[2] Openet oerings/sotware/convergent charging, January 2012.
[3] Forecast Report rom Shira Levine, Inonetics research Dec 2011
[4] Vanilla Plus im_les, Febuary 2010.
[5] Convergent Charging Sotware and Services market share and orecast report, Inonetics Research, June
2011.
[6] Vanilla Plus (downloads/expert-opinions4, October 2010
[7] Open Mobile Alliance (OMA) Charging V1.0, August 2011
[8] Tekelec published research rom industry analysis rm Heavy Reading, January 2012.
[9] Released excerpts rom its new Convergent Charging Deployment Strategies: Global Service Provider
Survey. Research Today, August 2011.
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ebruary
2012
Symsot is a trusted charging and messaging expert
with over twenty years o industry experience. Symsot
provides solutions enabling operators globally to stay
ahead o their competitors in an increasingly competitive
telecom market. Its innovative products are used by
leading operators such as America Mvil, Millicom,Polkomtel, Saudi Telecom, Telenica, Telenor, Tele2,
TeliaSonera and 3 in more than 30 countries, serving
over 120 million subscribers.
www.symsot.com
Middle East & Arica
Symsot MEADubai Internet CityP.O. Box 500649Dubai, United Arab EmiratesTel +971 4 36 16 637
Americas
Americas Symsot Inc.5700 Granite Parkway,Ste 200Plano, Texas 75024, USATel +1 972 731 6708
Corporate HeadquartersSymsot ABKista Science TowerFrgatan 33, PO Box 1219SE-164 28 Kista, SwedenTel +46 8 566 166 00
Asia PacifcSymsot Asia Pacifc9 Temasek Boulevard#31-02 Suntec Tower TwoSingapore 038989Tel +46 8 566 166 00
20 2 S AB All i h d