symsoft whitepaper 1202_ocs_wp.pdf

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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3March 2012

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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4 March 2012

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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6 March 2012

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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7March 2012

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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8 March 2012

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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9March 2012

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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10 March 2012

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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11March 2012

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

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