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Convergent online charging - The value of a unified view
With the majority of billing systems vendors now preaching the gospel of online convergent charging, European Communications looks at how it enables operators to become more competitive
As the telecoms industry continues to witness the ongoing expansion and globalisation of services and markets, not to mention the inexorable march towards the all-IP network, the imperative to create effective convergent online billing systems has never been stronger. As Orga Systems Product Marketing Manager Billing, Mathias Liebe notes: “Today's billing deployments literally must enable operators to converge from current circuit-switched and IN-based services to 'combinational' and all-IP based approaches.
“Future-proof billing solutions must have new qualities. Otherwise, convergent approaches to rating and charging will not be able to cope with the scalability needed to charge for existing SS7-based services, as well as the flexibility to handle SIP-initiated sessions.”
Certainly, the vast majority of the billing systems vendors are banging the online convergent charging drum, not least because they recognise, as Nokia is keen to stress, that an operator's charging system is one of – if not the – single most important part of the cellular network and business operation. Unification and modernisation of the charging infrastructure is therefore vital.
Jorma Pohjalainen, Director, Core Networks Marketing and Sales, Nokia Networks, details the requirements of an effective converged charging solution:
“The key element is the ability to charge in real-time for all services: voice and data, fixed and mobile, access and content, prepaid and postpaid.
“The charging system must also support bundling of these services, since many subscribers view bundling across voice, messaging and data as their preferred method of purchasing operator services.”
He goes on to explain that online charging requires tight network integration for controlling access, and that the charging solution must also grant quotas – in other words, reserve money from the customer's account, before the customer can consume any service.
“Centralised rating and account management gives an operator a unified view of the entire subscriber base,” Pohjalainen says. “This enables the operator to introduce new services quickly and cost effectively. At the same time, centralised subscriber management is also one of the key factors in minimising operational costs.”
Innovative services
In a climate where getting innovative services to market faster than the competition – but still ensuring that profits are being made from them; and keeping users from churning, while also ensuring that services consumed are paid for, are all crucial, it's easy to see how any assistance would be welcomed by operators.
“Many operators compete in mature markets, characterised by few 'new' subscribers,” explains Giles Newcombe, Senior Director, International OEM Sales, Convergys. “Increasing ARPU rather than subscriber numbers is a significant driver of revenue growth, so operators have to tap into the potential of both prepaid and postpaid subscribers. A focus on optimising the value of existing customers requires a re-think of BSS requirements, and a shift from stovepipe legacy environments to convergent online charging systems that can accommodate both prepaid and postpaid accounts and offer the flexibility to combine a variety of charging methods.”
Nokia's Pohjalainen agrees that the ability to offer the full range of services to different types of customers – particularly prepaid – is among the primary drivers for operators to adopt convergent billing solutions. Others include the fact that, clearly, since networks are converging, charging also needs to converge, and that because of increased competition, operators are looking for OPEX and CAPEX savings that a convergent charging solution can offer, while, at the same time, giving them tools to differentiate and compete.
Enumerating the advantages of convergent billing systems to operators, he notes that such systems offer the possibility of revenue sharing, and thus the ability to work with third party content providers, so extending the service offering. At the same time, customer retention is improved through the use of cross service bonus and loyalty programmes, while also providing the flexibility to support different business models and rating plans.
Holistic approach
Clearly, with a 'single view,' operators can adopt a holistic approach to customer management, facilitating more opportunities to cross-sell, up-sell, and increase ARPU and loyalty – particularly given that it is more cost-effective to hang on to existing customers, than to go out and find new ones. This approach enables operators to segment customers according to preferences, spending patterns, and identifiable behaviour that can be addressed with targeted services. In other words, the customer should no longer be viewed as simply a phone line or a SIM card, but as an individual whose spending and experience needs careful management.
Pohjalainen is keen to stress that the advantages of convergent billing are not confined to the operator, but equally benefits users.
“It enables customers to access all services, regardless of their payment method,” he explains, “while also providing the opportunity to establish hierarchical or shared accounts. So, for example, the user could have a family account where parents can control the usage of premium services by having those charged from a prepaid account, while normal voice connection is on a postpaid account.
“Bonus and loyalty programmes reward active users, while sponsoring can provide free access to certain services and/or content, and while these features undoubtedly enrich the user experience, they are clearly also a great antidote to churn.
“The online convergent billing system will also, of course, provide real time and flexible cost controls for all services,” he adds.
Siemens – who have, coincidentally, recently been developing an increasingly close relationship with Nokia – also sees the benefits for both operators and users, agreeing that the ability to handle both prepaid and postpaid transactions in real time is critical if customers and providers are to quickly check usage limits and status of account balances in real time. The capability allows customers to make informed decisions about their usage and expenditure, while enabling operators to better manage their risk and revenue exposure.
In the current, highly competitive marketplace, it is crucial for an operator to do as much as possible in order to stand out from the competition. Among the factors that facilitate positive visibility must be – inevitably – price, services and customer relationship, as well as the operator's own financial health. Pohjalainen points out that each of these areas can be positively affected through the innovative use of charging and service control technology.
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