Online convergent charging solutions have become a key weapon for operators in maximising revenue potential from users, says Giles Newcombe

Even the most applauded innovations and new developments take time to penetrate the mainstream, irrespective of industry or market segment. When they do, however, users wonder how they ever managed without them. Convergent online charging solutions are a case in point.
It is true that some online solutions have attracted negative media coverage and have failed to adequately satisfy criteria such as availability, scalability and functionality. It is equally true, however, that the marriage of highly-available IN technologies and advanced rating engines are re-shaping the online landscape.
Such solutions are enabling pioneering operators like P.T. Telekomunikasi (Telkomsel) to realise the true potential of their business and optimise service delivery and income generation. Fundamentally, online convergent charging can drive such benefits because it is about eradicating traditional distinctions between subscriber types due to payment method. Once rid of traditional BSS characterised by stove-piped and separate systems for prepaid and postpaid subscribers, operators are empowered to maximise the revenue potential from all subscribers and derive efficiency and cost savings

Business drivers

Many operators compete in mature markets characterised by few 'new' subscribers. Competition thus revolves around luring subscribers from competitor networks. Increasing ARPU rather than subscriber numbers is a significant driver of revenue growth, meaning that 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 is essential.
A fully integrated approach to prepaid and postpaid accounts -- one that provides a single view of a customer's accounts -- is essential to enable segmentation of the customer base and support next-generation applications and services. The billing system needs to afford all users access to the full range of 2.5G and 3G services and promote credit management across services. Increasing ARPU amongst prepaid customers relies upon those subscribers having access to the same services, tariffs, marketing offers, incentives, customer care and roaming facilities that are available to postpaid subscribers. Operators can unify offerings to both types of account, which simplifies and reduces the cost of marketing, and usage data can drive more tailored offers. This helps to boost loyalty, encourages prepaid users to migrate to contracts and cuts the costs linked with anti-churn campaigns. The ability to identify, handle and monitor prepaid and postpaid accounts from a central point serves to reduce operational costs, minimise churn and enable the management of credit/risk. Vendors are addressing this need by combining Intelligent Network platforms with fully convergent rating and billing engines, to support online accounts (prepaid), offline accounts (postpaid) and hybrid accounts (prepaid and/or postpaid).

Flexible rating and pricing

Whereas traditional voice-based engines rate against a fixed set of parameters (time, distance and duration), online content transactions will need event-based rating capable of processing any type of service against whatever measures are appropriate. The nuances of pricing for new services are many: streamed music purchases could be priced by transaction; advertising measured via responses generated; a videoconferencing session by duration; and an interactive game by the number of levels accessed. This requires a rating engine that is flexible enough to handle all existing pricing criteria and support whatever services may emerge in the future. Operators will also need the ability to:
*  Apply discounts across products and services: Cross-product discounts can provide incentives to subscribers and reward particular usage patterns. This approach, which can be especially useful in support of new promotions, packages and targeted offers, is equally relevant to corporate as well as private accounts, allied to the potentially lucrative interplay between the two. In addition to flexibility, both the rating engine and network need to possess the high availability and quality required to support an operator's business over the long term.
*  Deploy point-of-service pricing: Customers accessing on-line services require instant pricing information and transaction authorisation, which in turn requires that information flows between the rating engine and the network in real time. Postpaid systems are simply incapable of supporting this, so operators must deploy systems that facilitate on-line charging, which occurs within the lifetime of a call or event. Operators can then quickly verify usage limits and the status of account balances in real time, and customers can make informed decisions about their usage and expenditures.
When a customer downloads a video clip via a next-generation handset, for instance, they need to be pre-advised of the total price they will pay, and the amount authorised against their account balance in real time. Subsequently, if the content fails to download correctly, the customer's account needs to be topped up again in real time. Such functionality also enables operators to better manage their risk of revenue exposure. Operators need to closely monitor activities and the services they offer, not least in relation to high-value, low-margin services, which are potentially risky.

Sophisticated service scenarios

Convergence across all lines of business offers a major opportunity for operators to develop innovative packages that combine a range of services/products and discounts. These represent a chance to increase customer 'stickiness' and raise ARPU. Operatorscan devise sophisticated and lucrative convergent service scenarios around family-based usage or business and private accounts, etc. A user could, for example, operate two accounts from a single handset using one SIM card: one account for business and one for private usage. This opens up numerous permutations for cross-service discounts and innovative marketing.
In addition, convergent online charging enables operators to:
*  Combine the online and offline world to create new hybrid service offers. These can help both to rejuvenate older services and drive the penetration of new services. Packaged adeptly, with choice use of cross-service discounts, bonus and loyalty schemes, such hybrid services represent a significant revenue and churn-reducing opportunity for mobile operators.
*  Use the single view of all customers to drive joint product launches for prepaid and postpaid subscribers and better targeting of offers. Operators can analyse the data on usage patterns that is generated by today's advanced, convergent BSS to improve the targeting of services and bundled offerings. Ultimately, this approach helps to take the guesswork out of marketing, whilst also driving innovations in product and service strategy that might otherwise be lost.

Better fit between IT and engineering

Translating theory into practice always throws up challenges, particularly in highly complex communications organisations that have a tradition of distinct and separate IT and engineering functions. Whereas networks, and thus prepay and IN, have tended to be the preserve of engineering, rating and related areas such as packaging and discounting have largely been the remit of IT. Achieving true convergence, however, requires a closer linkage between these two areas and a coming together of BSS and OSS-related activities and functions. Failure to secure the commitment of both functions can seriously undermine the implementation, timescales, and operational effectiveness of a convergent solution. In short, convergence is as much about eroding the silo mentality within organisations as it is about technology. Coupling advanced technologies with improved flow of information and co-operation between departments, moreover, helps to strengthen and feed the marketing function.

Telkomsel: a case in point

Telkomsel, Indonesia's leading cellular operator since 1998, is leading the market through its investment in an advanced solution that simultaneously supports online charging and offline charging with a common rating application. Telkomsel identified a need to introduce charging systems that could handle large, complex volume processing and provide the flexibility required to tailor product offerings to individual customer segments, irrespective of payment method. With the chosen solution, Telkomsel benefits from a single view of its entire prepaid and postpaid subscriber base and a single point of entry for all product and pricing data.  The solution is designed to enable same services, discounts and bundles to be offered to prepaid and postpaid clients, and provide the company with the ability to adapt rapidly in response to changing market conditions and future developments. Equally important, the solution maintains existing network availability, successfully marrying today's network engineering standards with support for tomorrow's convergent services.
The adoption by operators of flexible convergent online charging systems that can seamlessly support combinations of both online and offline services will be key to them extracting the revenue potential from all subscribers. Such solutions will also help operators to develop innovative services and bundles, reduce costs and improve operational efficiencies. It is such qualities that will enable operators to be competitive and profitable over the long-term.                                 n

Giles Newcombe is Senior Director, International OEM Sales, Convergys EMEA, and can be contacted via tel: +44 1223 705000; e-mail:

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