Cashing in on convergent billing platforms

Dr Cynthia Leung/Ovum
09 Nov 2007

In a service driven market, operators must be able to quickly and cost-effectively manage, deploy and withdraw services to meet time-to-market requirements. For subscribers, multiple and complex pricing structures can be confusing and lead to slow adoption of new services.

A real-time convergent charging solution can significantly enhance the flexibility of pricing plans. Instead of being an impediment to new service rollouts, a charging system can drive change with the fast launch of new pricing strategies. For example, moving to a 'pay-for-content' model from an 'all-you-can-eat' one will deliver higher profits from content and drive increased demand.
Merged payments

In a traditional network - fixed, GSM or CDMA - the charging and billing systems are tightly coupled with the services, with specific charging rules and bill formats.  Consequently, the billing for each type of service is independent of others, limiting information sharing and flexibility.
In existing networks, prepaid services are commonly developed in intelligent network (IN) systems. For post-paid subscribers, a call detail record (CDR) is generated when service usage is complete and passed to a separate offline billing system for batch processing. There is always a time delay between the CDR being mediated, rated and debited from the account balance. The latency is even higher for roaming calls.

The first step to convergent charging for most operators is merging prepaid and post-paid. To converge, all the charging and accounting functions are separated from the network and service control in the IN structure. This allows managing the relevant subscriber account information distributed in different systems to be centralized. It also enables the offering of mixed user accounts composed of post-paid sub-accounts and prepaid sub-balances.

Convergent charging also requires real-time measurement. Before service delivery, the real-time system first authenticates the subscriber and checks the account balance. When the account balance threshold set by the operator is reached, the user is warned in advance or service is disconnected to prevent further use. With this mechanism, operators can greatly reduce revenue leakage due to last-call exposure and extra-long malicious service usage.

Trends and outlook

Convergent charging is attractive to greenfield operators in developing countries and emerging markets as they are unhampered by the constraints of legacy infrastructure.

This approach to billing is also becoming the trend for telecom operators whose prepaid users account for a major percentage of their subscriber base, since all services and packages become available to prepaid users and the potential of the prepaid market can be exploited more.
In the migration path to next-generation charging, 3GPPR6 has defined an online charging system (OCS) in the IMS architecture. Interacting with the service control layer through Diameter Credit Control protocol, OCS supports multi-charging modes (content, traffic, volume) for voice, data and value-added services. It provides prepaid rating and real-time control of services for different account types and management requirements, spanning PSTN, PHS, 3G, IMS, WLAN and broadband IP-based networks.

Going forward, operators still need to integrate the converged rating and charging with backend OSS/BSS, and converged customer care and self-provisioning systems.

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