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| By John L. Guerra |
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| March, 2002 |
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General
Packet Radio Service, the data layer that resides atop GSM, is not
progressing at the pace once envisioned. Though it’s still touted as
the natural step to 3G networks, the architecture has yet to translate
into a workable stable of data products and pricing that an already
confused public will understand. Carriers for the most part can’t
charge based on the kind of service accessed by the handset user. They
don’t charge per e-mail, or per MP3 download. They instead charge a
flat fee.
“Greater than 99 percent of GPRS providers measure
usage in bytes,” says Narus founder Ori Cohen. “For a typical user, it
doesn’t make sense. He doesn’t know what 10 megabytes translates into.
What is he going to get for 10 megabytes? How much e-mail is it? Is it
25 Web sites?”
Some Momentum Is Evident
Some strides have
been made in the past year: In July 2001, AT&T, Cingular and
VoiceStream launched GPRS services. AT&T’s is limited to the
Seattle area, but it plans to move into other metropolitan markets
throughout 2002. Billing vendors such as Convergys won GPRS billing
contracts with AT&T, Brazilian operator Telesp and Orange France.
Mediation vendors such as Narus launched new platforms to handle GPRS
and 3G; Cerillion Technologies won a contract to provide Jersey
Telecoms with an integrated GPRS/CRM and billing system. And Sentori
sold GPRS billing and mediation capabilities to enterprise users such
as a Swedish railway system.
These efforts indicate some
momentum with the technology. Yet mediation goals for GPRS—that is,
charging customers by the e-mail, or Web site, or tickets purchased
over the handset—are still unmet. “If you have GPRS mediation now, it
will tell you how many bytes have been used, but it will not give you
any information about the content the customer is using,” says John Vu,
Sentori’s vice president for business development. “From a business
model, you are limited to byte-based pricing.”
Pricing Remains Uncomplicated
Carriers
still bill for wireless data in basic ways: One, they charge by the
byte (bandwidth); two, they charge by the minute (airtime); three, they
charge for both.
For instance, VoiceStream’s pricing scheme for
its national GPRS service, dubbed iStream, includes 1 megabyte of data
and the ability to access e-mail from up to 10 different accounts for
$2.99 a month with a voice plan. Each additional megabyte of data costs
$10 a month. Plans with more megabytes for users who want to hook up
their phones to a laptop or pocket PC handheld cost $20 and up per
month.
Carriers, therefore, are moving to upgrade or install
mediation systems that will let them charge end-users based on the kind
of services they download in ways end-users will understand. “We’re
seeing a shift in mindset toward content-based billing,” Vu says.
“They’re moving to selling services as premium content.” Narus’ system
uses semantic traffic analysis that translates user bytes into user
activity. It is designed to capture all the user activity, process that
information and transfer the records into the billing system. It sits
between the Servicing GPRS Support Node (SGSN) and the Gateway GPRS
Support Node (GGSN), and reads the labeling to determine the content of
the packet. “The determination of whether the customer is going to
Yahoo! or CNN is in the packet itself,” Cohen says.
Carriers
that aren’t looking for ways to upgrade their mediation systems to
handle packet-based billing better pay attention, says Yankee Group in
its report “Billing for Mobile Content: A New Challenge for Mobile
Service Providers in Europe.” The report cautions that mobile service
providers there must implement billing systems that “allow tariff
models to reflect price elasticity, while at the same time respecting
limits of consumer sophistication and their likely acceptance of
radically new schemes.” Yankee believes subscribers and content
developers will “migrate to service providers with superior service
pricing models and content portfolios.” Not only that, European
carriers have invested $116 billion for 3G licenses and may have to
fork out as much as $157 billion more for initial 3G infrastructure and
application development. They’ve got to find ways to make money now by
offering compelling services and charging for them in entirely
different ways than those used for voice. The same holds true in the
United States.
The billion-dollar question becomes: Will enough
people pay premium fees to seek faster speeds—to download large files,
for instance, or access company training documents on the road—to turn
GPRS into a money-making proposition?
Carriers believe end-users
still and will want greater bandwidth and access to all kinds of
wireless data, and that GPRS’ ubiquity marks the path through which the
data will be delivered. The problem is, no one knows what kind of
applications or services will light the public’s candle.
The Basics of GPRS
Carriers
use GSM for air connectivity, while GPRS, layered onto the GSM, gives
the network IP backbone connectivity. The IP layer connects to the
wireless GSM at the GGSN. It is effectively like a router. It has the
same abilities as an IP router to route IP packets anywhere in the
world. It controls the flow of GPRS traffic into the IP backbone. As
GPRS is an always-on technology, the billing environment is very
similar to a DSL environment. The GGSN can measure traffic by the
megabyte, and in an always-on environment this is the most likely way
of charging the customers. The GGSN and SGSN can interface to a
charging gateway, in effect a mediation layer that can take CDRs of the
support nodes and act as aggregator or do preliminary rating of the
CDRs; alternatively, the CDRs can be picked directly from the support
nodes.
Moving from Flat-Rate to Event Billing
How, then,
does a carrier move from charging by the byte to charging by virtue of
the service accessed? How does a carrier capture, mediate and rate for
different kinds of wireless data services?
The first step is to
realize that you’ve got to handle multiple sources of event records
coming from different parts of the network, says Darren McKinney,
director of mobile product marketing for Amdocs. “You’ve got CDRs,
IPDRs, other formats coming from the SGSN, the GGSN, a video-on-demand
server,” McKinney says. “There may be some situations where the
information has to be correlated with service information.”
According
to Motorola and Logica, which co-developed the Smart Mediator, a GSM
user creates an average of three CDRs a day. But GPRS creates five
types of CDRs producing up to 50 CDRs per person per day. Other
billable or differentiating information may be culled when the data
layer is added: volume, location, quality of service, value-added
content, time/duration and mobile originating/mobile terminating
numbers.
The mediation system should not only grab the
accounting data necessary for billing, it should also filter the data
that’s not needed. It should also be able to translate the various
formats to be sent downstream to the billing system.
“The
general consensus is that network equipment providers are complying
with the standards to varying degrees,” McKinney says. “Not all network
providers are the same. If you have a Siemens charging gateway and a
Nokia gateway, they interpret the network and event records
differently. In general the records look similar, but there are some
nuances between them.
“The challenge is to get mediation to do a
layer of formatting of the various IP servers, video-on-demand servers,
IPDR, all with varying layers of compliance; the record you get from
the IP service element will be proprietary in nature. You have to
translate that into something meaningful for the mediation layer.”
The
system also has to correlate network information and service
information to combine data into one CDR. Another method to identify
various kinds of packet or data services is to assign them a number at
the access point network (APN). The first device the data hits is the
SGSN, the second is the GGSN, which routes the data to the Internet or
intranet, McKinney says. “The APN then routes you out of the network.
You then assign each APN a number that correlates with a service. APN-1
may be the messaging service; APN-2 the gaming services; APN-3 the
intranet for corporate communications. By seeing which APN the data
went out, you can see what service they chose.”
Information can
be gained by looking at the URL the customer accessed, McKinney says.
“From there you can fashion a rate, based on the URL accessed. This set
of URLs is known to have stock quotes, which costs 10 cents a look.
Though URL and content-based pricing is an option, it doesn’t work that
well when they go outside [your selected Web sites for them]. But when
they’re within your mobile portal, you then have the option of pricing
on content.”
Jumping the Garden Walls
The concept of the
“walled garden” is this: Since the advent of GSM, wireless carriers
have been signing agreements with set content providers to populate a
portal. Verizon, for instance, might make available certain news
outlets, stock-trading sites and weather sites that customers can
access by moving an arrow key and hitting enter. Those set services are
available as part of a garden. When a wireless user keys in a URL that
is not part of the carrier’s portal offering, he goes beyond the “wall”
and into the general Internet.
“When the user goes beyond the
walls, an operator loses the ability to see what’s going on,” McKinney
says. “Carriers are experimenting with different kinds of sniffing
techniques, trying to put a tag on the IP header for identification
purposes. It’s much more difficult to determine which URL people are
going to.”
One way to grab that revenue is to charge the
end-user for transport—that is, charge a higher per-minute rate to
recover transportation costs. Another is to determine how much data is
downloaded and charge per byte. “Outside the walled garden it may be
transport only, or volumetric.”
Content, Content, Content
Xacct
Technologies uses a similar billing model. “Let’s say I’m out on the
World Wide Web somewhere,” says Steve Hamrin, Xacct’s senior market
manager for mobile data. “I do an FTP download—clearly that’s not an
event that the operator would charge me for. The operator will act as a
pipeline, using a threshold set by the operator that would charge me
for the download. It makes sense where the operator doesn’t have
control over the content.”
But carriers can’t realize much
revenue with that model, he says. “Clearly that’s not a moneymaking
scheme for the operators. The moneymaking scheme is all about content.”
The
future holds the possibility of complex agreements wherein the content
provider must be able to identify the user as a wireless customer,
identify that wireless carrier, determine which content has been
accessed, and charge the carrier for that content. “Operators could buy
or rent content. In the case of rich content, they’ll own that content.
In other cases they’ll make themselves the conduit for the content,”
Hamrin says.
In terms of content, one category might be
data-heavy, the other might be called data light. If you’re an
operator, you’d prefer your customers to be using data light, such as
SMS, chat, e-mail.
“If you have customers downloading FTP, it
takes up a lot of bandwidth. As you move toward those large files, it
becomes harder and harder to price for those. When you throw in quality
of service, and it needs to be there for data heavy, the more costly
the services,” Hamrin says.
“You need new systems in place so
the provider can measure the quality of service that’s occurring,” he
says. “If it was unsatisfactory, [the problem] could occur in the air
interface, the core network, on the IP network or on the Internet
itself. The operators have a tremendous challenge in understanding
what’s happening in their network.”
Roaming Agreements
for GPRS?
Roaming
agreements are in the early stages, but some reportedly exist between
VoiceStream and Vodafone. “I suppose there may be some harmonization of
rates here, but as for the whole idea of GPRS roaming, we’re in the
very early days,” Hamrin says. But there remains the two standards,
GPRS and CDMA, which lead to interoperability concerns. Operators such
as Sprint plan to introduce CDMA 1X, the CDMA equivalent to GPRS.
Xacct’s
offering, XacctMobile, can pull customer identification
information—either via the phone number or International Mobile
Subscriber Identity (an alphanumeric string) at the gateways, Hamrin
says. On the IP level, Xacct now uses IP addresses in a dynamically
hosted configuration. The software links the IP address with your
identity as it’s defined coming out of the GPRS network.
“It
depends on what the billing system or the provider wants to see—an
event, a downloaded file, for instance,” Hamrin says. “In that case we
would aggregate based on the event. How I want to bill should tell me
how I want to aggregate the data. This process should start with the
sales and marketing guys.”
As a final point, Hamrin cautions
that it takes more than technology to set up a good GPRS mediation and
billing system. “GPRS is a great test of organizational ability and to
communicate across departments. It’s definitely the biggest test we’ve
ever had,” he says. “The network organization, the IT organization and
the marketing organization have to work well together.”
Common Wisdom Revisited
The
idea is that if GPRS works out, it should be seamless to the customer,
who theoretically doesn’t care about content agreements or
architecture. What matters is whether the service is worth the cost and
whether the quality of the service is acceptable. For instance, some
carriers charge for retransmission. If the user surfs to Yahoo! and
packets are dropped, the carrier often retransmits the packets and
charges the user for the retransmission. Users may not appreciate that.
“Customers
have no way to go back and check the bill; they have to trust the
provider,” says Rene Sotola, CTO of AMS’ Tapestry Division. “If
customers want to read their e-mail remotely, they may want to be
selective. The length of e-mails can range from 100 bytes to 1
megabyte. You have the issue of user acceptance. Users may want a
filter to keep email to a certain size, to make sure that you don’t
download the Encyclopedia Britannica by mistake. It’s hard for a user
that’s not computer-savvy; one event could attract several charges.
Data is a brand new issue for the user.”
Confused customers will
put a strain on a carrier’s data records and call center staff. “The
worst thing that can happen is that the user can dispute the bill,”
Sotola says. “You’ll lose quickly with an ongoing dispute. But if the
provider can capture the information that the user had a bad
experience, if the call goes south during a video feed, carriers can be
proactive with credits, you can send a free credit or the offer of a
free call.” Media reviews of the AT&T and VoiceStream GPRS launches
were less than favorable (see “GPRS Launches Sputters in the Air.").
Sotola
also believes a bandwidth divide could occur if a carrier doesn’t
balance the needs of low-bandwidth end-users with high-volume business
customers. “The GPRS speeds today are far smaller than what was once
believed. The theoretical speed was 172.2 Kbps with the current
networks, but it was more like 20 to 50 Kbps last year. No one talks
seriously about 172 Kbps, because that’s one person speaking over eight
time slots without interference. The practical limit is closer to 112
Kbps. It gets even slower when introducing videos,” Sotola says. You
can’t predict how many users will be on one tower.
“The provider
must pay attention to the very heavy users who may be getting way too
much at the expense of the low-end user. Maybe the providers will
determine in the long run that some users will just be left out.”
Partial
events—splitting up a call between towers as calls are handed off—are
another problem. “You’re driving in the car, and the call is happening
in two or more of these networks,” Sotola says. “The billing and
mediation system needs to understand that this is the same call.”
Another
oddity: transit delays caused by errant transmissions. “The GPRS
packets, when they are transmitted, are actually sent in different
directions to meet the same destination,” Sotola explains. “That opens
the possibility of loss or corruption of packets over the radio link”
Clearly,
there are a lot of hurdles to overcome, but carriers aren’t backing off
plans to bill for content. “In real estate it’s all about location,
location, location,” Xacct’s Hamrin says. “With operators it’s content,
content, content.” |
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