Kill Bill‾

Olivier Suard, Comptel
25 Jul 2006

In the mobile phone world, pay as you go is a well-established alternative to formal billing relationships with operators. It's a principle that has been around for years in areas such as public transport. But can it transfer to other areas of telecom‾

Telecom operators are increasingly looking to expand their market share and boost revenues in new ways, leading them to look again at the potential fruits of the prepaid market. On-demand services seem to be one method for operators to expand prepaid revenues.

Another influence is the trend towards convergence, where service providers can offer the same services regardless of the delivery mechanism or the payment method.

For example, operators can set up a user service with no monthly bill payments. Whenever users wish to surf the Internet, they can purchase tokens containing a code that can be entered into a login screen, getting them online. Users can also choose to have a credit balance similar to Skype or iTunes, allowing them to monitor their credit levels online as they spend.

Such mechanisms make the user experience simple and easy to operate. For the service provider, however, it is far from simple. In fact, for any operator considering offering pay-as-you-go services, there's a lot to think about.

Traditionally, prepaid charging has always been handled in the intelligent network platform. But this has to change with on-demand services as charging needs to be much more tightly linked to provisioning and services need to be updated in real time. Also, many of the services are not actually in the network but on content servers. Any delay will result in windows of risk for service providers to lose money.

The increasing diversity of service means charging has to move to the mediation layer. It has to become an extension of usage collection. The whole rating and balance management is now handled in that layer.

With the move of charging closer to the network, the role of billing is made much simpler, merely producing bills and collecting money. This change of emphasis within the network will lead to a fundamental shift in the OSS/BSS market, because the BSS world will be opened up to the competition of large mainstream software suppliers.

Traditionally, BSS is basically made up of three components: order management and customer relationship management, mediation, and billing. For some time, carriers have been able to manage order management and CRM with off-the-shelf software by vendors, and these companies have made good inroads into the telecom service providers. Meanwhile, mediation has always been a niche market, left to smaller specialist players.

Finally, there's billing, by far the most complex slice of the BSS pie as it has to cover capabilities for rating, bill calculations, bill formatting, presentment and dispatching, and collections. Because of its complexity, this market has been dominated by specialist telecom billing companies.

Until now, these companies handled all of the elements of billing in one comprehensive package. But with the advent of on-demand services, this "Ëœbilling monolith' will have to be broken down and dealt with in separate parts as they will fit together differently. In particular, rating has emerged as a separate market, in the form of convergent charging, and will be handled much closer to the network than that which is touched by BSS suppliers.

Convergent charging solutions overcome all these challenges, helping the operator to differentiate in highly competitive markets by offering a smooth evolution of the operator's current network - and BSS/OSS - environment into a fully convergent solution.

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