Picking Up the Bill
In this climate, billing and tariff planning are presently on the back seat of the mobile Internet bus. But few anticipate that billing will stay out of the front seat for long.
by John Williamson
Global Telephony
Friday, March 08, 2002
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Given the amount of cash and rhetoric already invested in 2.5G and 3G cellular networks, the first priority of many service providers is to get the largest possible number of mobile data users on air in the shortest possible time.
To this end, some operators are virtually giving service away, according to Kieran Moynihan, CEO and co-founder of Comnitel Technologies, a Cork, Ireland-headquartered mobile service assurance specialist. In Sweden, for example, GPRS is free for three months, Moynihan said, and in Italy, providers offer flat-rate fees for GPRS access regardless of the volume of data downloaded.
In this climate, billing and tariff planning are presently on the back seat of the mobile Internet bus. But few anticipate that billing will stay out of the front seat for long. Andrew Court, the Bicester, U.K.-based Europe, Middle East and Africa marketing director of mediation software concern Openet Telecom, said that flat fee and other “soft” charging approaches won't wash longer term simply because operators need to claw back their enormous investments. And the only way they can do that will be by developing innovative value-added services and deploying new and sophisticated usage-based billing systems.
Sophisticated 3G tariffing and billing may be easier to say than to do. It's certainly a radical departure from what goes on in 2G. “For traditional voice or circuit-switched services, tariffs were historically based on a small number of attributes — basically the distance between A and B, the time of day/weekday and the call duration,” said Neil Philpott, the London-based Europe, Middle East and Africa director of product marketing for the Software Systems division of broadband company ADC Telecommunications.
DIFFERENT STROKES
According to Robin Burton, head of marketing for London-based billing concern Cerillion Technologies, the traditional distance- and time-related variables of voice are inapplicable when charging for data services.
With IP packets able to travel different paths to their destination, the value of distance as a determinant of charging is undermined. “You don't necessarily know where the destination physically is on the Internet or what routes will be traversed,” said Peter Tripoli, vice president of the integrated solutions unit for Danet, a systems integrator headquartered in Frankfurt, Germany.
Likewise, time of day and call duration look less logical in an always-on network. “Events are not unambiguously associated with defined ‘start’ and ‘end’ times,” said Richard McBride, director of strategic futures for Intec Telecom Systems, a Woking, U.K.-based OSS company.
“In packet data networks, the connection time is no longer a significant measure of the call value,” said Barbara Cantalupo, mobile IP domain analyst for Rome-headquartered billing specialist Smarten Software. “The user can be connected to the GPRS network without actually utilizing the network.” Omnitel Vodafone in Italy is using Smarten's Mobile IP billing solution to bill by both data volume and content type.
ADC's Philpott said that charging for data services can be based on traditional voice charging attributes, plus any number of new “designer” attributes such as on a per-packet or per-megabyte basis.
There are other possibilities. McBride suggested symmetrical or asymmetrical charging where terminating data has a different value to originating data and charging on a pseudo-voice basis, which is duration- but not data volume-related, for things such as videoconferencing.
How voice gets charged for in 3G is moot. Some observers such as Brand believe that initially it will be done in the same way as 2G because that's what subscribers are used to. But McBride said that some service providers could offer free minutes, or even completely free voice, and rely on compensatory revenue from other services.
One of the simplest 3G billing options — charging for data volume — may not be viable in all circumstances. “If I'm downloading a best-selling CD, why would I pay more for Madonna than I would for Kylie just because one's got more bytes than the other?” Philpott said. It's an interesting question.
Mere volume doesn't address value, either. The opportunity to charge variable rates based on the value of content can only be realized if operators can capture metrics such as the content of the message and the quality of the transmission, said Robert Machin, principal consultant for Reading, U.K.-based Logica Telecoms Solutions. “If he can't, he only has the raw usage metric to work with — which would be rather like delivering coal and diamonds but only being able to charge by weight.”
There's some debate about how viable billing for 3G QOS will be. QOS is generally acknowledged to be considerably more than a “nice-to-have” in 2.5 and 3G.
Comnitel said its mSure system allows operators to measure QOS from end to end in the mobile network. However, according to Demetrius Taylor, vice president of product management for Cincinnati, Ohio-based billing system developer Convergys, there are practical problems. “In concept, while a billing system can bill for QOS, when you get into 3G roaming, the lack of standards and different network deployments makes it truly a challenge” he said. Telesp Cellular in Brazil, thought to be the first Latin American operator to offer 2.5G services, is among the users of the Convergys Atlys billing solution.
TRICKY DICKERING
While the metrics of 3G billing and tariffing are different to those of 2G, the logistics of 3G billing are much more complex.
For one, there may be many more players in the food chain. “It is not simply a network operator billing a subscriber” said Richard Brand, head of product management for Cologne-headquartered billing concern TelesensKSCL. “This can get very complex when more than one partner shares the revenue or if the chain includes aggregators and brokers and so on.”
There are control aspects of this multi-tenant service structure. Tripoli noted that in traditional billing setups, the people who were responsible for billing software were free to reach down into the network elements because they were owned and controlled by the operator. “Now in 3G, you have the situation where ownership and control may not belong to the entity responsible for creating the billing,” he said.
3G roaming looks to have the potential to occasion some sleepless nights. For Smarten's Cantalupo, voice roaming is already very complex. “When data is added to the scenario it becomes more complicated, as packets can individually pass through different channels depending on [the] routing algorithms in force,” she said.
3G prepay promises to be another big can of worms. “It is not time-based, and therefore, there is no predictable cutoff point where you can decide on charging points or when and whether to terminate the service,” Cantalupo said.
This seems to mandate real-time rating and billing. Mobile commerce, for example, will increasingly demand real-time interaction between the customer's account and the service platform to confirm their ability to pay, Machin said. “Diversifying services are likely to lead to a demand from customers for multiple accounts for different kinds of services, perhaps carrying different account rules,” he added.
SLOW BURN OR BIG BANG?
In any case, it's clear that the volume of data generated by 2.5 and 3G services that could be captured for IP detail record (IPDRs) is much higher than for conventional call detail records (CDRs). Cerillion's Burton calculated that the volume of IPDRs can be from five to 50 times higher than CDRs. Cerillion supplied the billing system to Manx Telecom, the Isle-of-Man-based operating subsidiary of BT.
In late November 2001, the McLean, Va.-headquartered Internet Protocol Detail Record organization released the 3.0 version of its Network Data Management-Usage, or NDM-U, specification. This defines a common record format for the capture and exchange of usage data between IP-based switches, servers and business systems. However, according to Darren McKinney, director of mobile product marketing for Chesterfield, Mo.-based billing company Amdocs, many new generation event record formats remain to be standardized. And once records have been collected and correlated, the consolidated event record obviously needs to be routed to an appropriate billing system.
Can existing billing systems be adapted to handle these records or do you need to forklift in completely new systems? McKinney identified three possible approaches to this conundrum and said Amdocs has solutions to facilitate each in the form of its Amdocs Mobile and AmdocsEnabler offerings.
First is upgrading legacy billing systems. This is often seen as a lower cost and faster time-to-market solution than other approaches. The downside to it, as noted by McKinney, is the limited functionality this can achieve.
The second strategy is to implement parallel support for new generation services. This may be a faster and lower-cost proposition than a soup-to-nuts change-out and also has more functionality than a legacy system upgrade. It may not be easy, though. “Many present legacy systems are monolithic… [and] are not designed for easy integration,” Cantalupo said. Nor will it necessarily work everywhere in the longer term.
McKinney said the third strategy — the complete replacement of existing billing systems — offers the best deal in terms of functionality but is probably the most expensive and longest winded. He says that few operators are presently going down this road. One that did, though, is Manx Telecom. “In the Isle of Man, they decided to go for a ‘Big Bang’ and replaced everything,” Burton said.
But whichever of the various migration strategies is adopted, the serious 2.5 and 3G players are clearly going to have to grasp the billing nettle real soon, real quick.
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