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| By Susana Schwartz |
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| July, 2003 |
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In
an attempt to increase revenue and mitigate churn, carriers are
stepping up efforts to court the untapped buying potential of the
prepaid customer base by luring them to postpaid services or augmenting
postpaid offerings with prepay payment options.
In the U.S.,
AT&T, Sprint PCS and Verizon Wireless are exploring content, gaming
and presence technologies that will drive people to next-generation
services.
Despite the higher cost and inconvenience of prepay
to consumers, there will be a sensitive balance to strike between the
services offered and the types of legal obligations customers will be
willing to enter. Because prepay traditionally fosters control over
expenditures and commitments, customers will shy away from legal
obligations or the risk of unexpectedly high bills.
Carriers
like Alltel, with its SimpleFreedom promotion, and AT&T, with its
GoPhone promotion, are starting to appeal to different demographics of
customers by offering low-cost phones through large chains without
credit checks. Such promotions will be a means to "hook"
non-traditional postpaid customers, thus enabling upselling and
cross-selling opportunities. Customers could be coaxed toward postpaid
through free minutes and awards that garner higher standards of
customer care, further boosting their loyalty to the network. These
incentives could galvanize prepaid consumers to give up personal
details—including data that can be culled for more effective target
marketing.
As target marketing campaigns succeed in luring
prepaid customers to postpaid and vice versa, convergence will be
paramount. Thus far in the U.S., CDMA 2000 and TDMA networks are not
yet supporting convergent pre- and postpaid applications. Yet, in other
parts of the world, it’s a different story. In Italy and Sweden,
Hutchinson 3G (branded as "3") is rolling out some convergent services
that are rumored to be heading for its U.K. properties as well.
Merging Distinct Architectures
Converging
distinct pre- and postpaid architectures will be arduous, as each
possesses unique characteristics. Prepay is simple and reliable because
it involves simple tariffs and generates no printed invoices; yet, it
is sophisticated in that it requires real-time control to handle strict
timing constraints. Conversely, postpaid is simple in that billing runs
can be done overnight, rather than in seconds, but complex in that
there are more complicated tax rates, loyalty plans and credit schemes.
“There also exist political contrasts, as prepay usually is
controlled by the network resources, and postpaid by IT resources, as
it traditionally was the IN that managed the traditional voice calls in
real-time,” says John Trembley, director of telecom and networking for
TimesTen. The company’s technology is incorporated into Amdocs and
Schlumberger Sema systems. The company has also worked directly with
Sprint PCS and Telecom Italia Mobile.
Because network probes
collected data from NEs (such as softswitches, AAA servers and charging
gateways) and processed and computed balances, it was the probes that
interfaced with billing systems in order to allow the network to know
subscriber balances and what actions to take.
With impending
convergence, however, the process will not be so straightforward. There
will be ramifications in mediation, billing and the network. The model
that emerges around each of those elements will depend on each
carrier’s architecture.
Mediation: The Achilles’ Heel?
While changes will occur at all levels, it is mediation that will go through the most formidable transformation.
Mediation
systems don’t necessarily have the capability to retain balances over
the long haul or to generate invoices. That process invites latency, as
the collection of network usage information, rating and charging and
the ensuing communication among IN, mediation and billing elements,
translated into minutes—minutes that are unacceptable in data services,
where it translates into revenue leakage and churn.
“Mediation
will ostensibly become more intelligent in that it will manage
bidirectional messages between the SCP [service control point], rating
and billing in real time,” says Dawn Jaglowski, Atlys product manager
at Convergys. “It will be important that mediation hubs or gateways be
agnostic, as the type of NEs will differ according to the SCPs with
which they interact.”
With mediation fielding complex media
streams, it could become the Achilles’ heel of convergent platform
strategies. Carriers will need mediation engines designed with APIs
capable of reaching out to multiple data collection points without
tremendous coding. It will be imperative, too, that billing and
customer care providers bring an integrated front end so that CSRs and
self-provisioning subscribers can have a smooth and seamless process
for ordering new services and hybrid accounts.
“While
traditional mediation devices will still handle the collection of
protocols and conversion of data for OSSs, new mediation systems must
now sit in front of the customer relationship or between the customer
and the provisioning of the switch by the CO,” says Brian Rank,
business development manager at Intec Telecom Systems. He believes the
evolution of mediation will go through three phases: protocol
mediation, active mediation and business mediation. “Capabilities will
evolve as business mediation for WLAN and GPRS type services in 2.5 and
3G will make the network increasingly important.”
“Mediation, as
the facilitator for transaction-based processing, will no longer be a
one-way pipe to billing and fraud systems; it must capture data and
match it back to the network for provisioning,” Rank adds, noting more
sophistication in mediation will enable it to become responsible for
rating. “Then it will receive a small amount of the balance from the IN
system or balance system, which manages the master of subscriber
balances.”
The key is that there must be a single point that
knows the balance for the subscriber. “That could be left to the
real-time system or an external billing system, enabling mediation to
deal with real-time activity, without putting the balance at risk,”
says Graham Cobb, director of IN networks and business development at
Telcordia. The technical trade-off, Cobb says, has to do with speed of
response and reliability on where carriers put that information.
“Mediation
can actually take the responsibility for managing small portions of the
balance, so, a $50 account can be held on the traditional IN or billing
system. When the subscriber turns the phone on and logs into the
network, the mediation layer can request a small amount—say $5—from the
balance master and then track what the subscriber does in using up that
small amount,” says Cobb. “Once that amount is used, the mediation
layer can request more from the overall balance of $45.”
In
content purchases, mediation and billing systems will have to be as
reliable as the intelligent devices asking the questions. To be fully
content-aware, mediation must support a wide variety of protocols, such
as POP3, HTTP, FTP, SMTP, WAP and MMS. And, mediation will increasingly
work with rating, billing and the network in converged platforms. As a
means to that end, billing and IN companies are partnering with
mediation companies to enable convergent architectures.
“It
will be the intelligent equipment that will intercept and analyze
packets of information that track the flow of data,” says Joe Hogan,
CTO and founder of Openet Telecom, who notes real-time rating platforms
will decide cost, and real-time mediation will receive the request from
intelligent equipment. “When IN equipment picks up on a URL or Web page
hit requesting premium content [whether videos, MP3s or games], it will
trigger mediation, which must then approve that request.”
For
that to happen, there has to be an integrated process, where
IN—comprised of SCPs—directs interfaces of tear-downs and call set-ups.
“That process has to be controlled by the rating engine, which should
have a high-availability component to it, so as to determine whether to
set up the call based on the prepaid balance of a customer,” says Rick
Findlay, director of wireless industry solutions for Convergys.
As
IP switching and voice switching equipment become reliant on active
mediation, carriers have to be able to allow customers to change data
and voice services, which requires call records with each service
change. That has to go through mediation, get rated and go through
billing—all in real time. Carriers should realize that real-time rating
doesn't necessarily mean there are real-time billing or real-time
pricing capabilities.
“Products should have real-time messaging
capabilities for prepay customer care applications, or for making
postpaid applications real time, says Reid Drucker, a partner at
Accenture. “To that end, data-centric mediation players seem somewhat
better positioned for the convergent world than the others.”
“Carriers
figuring out how to deploy text alerts against subsequent event types
must keep in mind that updates in batch, although fast, are not real
time, so batch systems will not be suited for multiple services on
converged platforms,” says Steve Zielenski, vice president of strategic
solutions for Portal Software. He notes that RFPs should seek out
systems that manage multiple balances with an orientation toward bytes,
value, content, text and MMS.
Delivering control to provisioning
requires real-time control and dynamics, so provisioning products that
talk to rating and balance management must also work in real time. “If
an application takes off, you don’t want to lose hundreds of thousands
of dollars because you can’t change the price at the right time,” says
Zielenski.
Since prepay’s support for limited rate plans makes
charging for content and special discounting difficult, the roll out of
systems that can change pricing instantly is important right now.
Where
reporting intelligently to the mediation system was easy in a postpaid
environment, the requirements for real-time rating and balance
management, as well as credit authorization for prepay, require that
mediation openly communicate with the network’s IN and balance
management systems in charge of master subscriber balances. Balance
management systems would be accessed from CRM systems, which will
permit CSR staff to view users’ balances so that they can top up
customers’ balances by accepting credit card or cash payments, or set
up direct debit arrangements to automatically top up accounts. With
that capability, CSRs could also award credits for dropped calls and
other issues.
As carriers evolve toward self-care, they will
rely on mediation to handle the business logic processing—necessary to
match data to network elements in real-time provisioning and
self-provisioning. “Mediation is the aspect in the relationship that
has to be maintained between application providers and service
providers,” adds Rank, noting that carriers’ systems will ultimately
have to migrate customers from postpaid accounts, while simultaneously
maintaining pre-pay balances.
“While the goal is to converge on
a single platform and single OSS for pre- and postpaid, carriers must
be aware that hybrid solutions often drive customer care costs in terms
of the number of times customers call into call centers,” says Michael
Anderson, vice president of global market development with ADC.
That
increase in calls to customer care centers is attributable, in part, to
the fact that spending and credit-limit systems don’t enable immediate
re-provisioning. “That means it takes three to 12 hours to reactivate
accounts,” says Tom Erskine, vice president of product development and
marketing with Boston Communications Group, which handles billing
services and real-time subscriber management and payment services.
“That will dramatically increase calls to customer care centers as
customers become frustrated.”
While prepay always has been a
real-time story, as the network would cut users off once balances
expired, carriers now will want to send text messages to enable the
users to automatically top up their accounts, moving closer to the holy
grail of self-care applications. That will require that convergence
start at the front-end with customer care responsible for facilitating
a smoother provisioning experience.
Firehose In Your Face
In
Europe, where prepay is commonplace, SCPs are built into networks to
facilitate cost-effective prepay services. In the U.S., however, there
is a cost element for carriers with decreasing capital expenditures and
legacy prepay and network elements in place.
“Carriers are not
done once they consolidate prepay customer care management with
billing; rather, they will discover a billing system needs real-time
signaling commands to the SCP in order to control prepay voice calls,”
says Anil Uberoi, senior vice president, marketing and business
development at Xacct Technologies. The company's IP mediation and
real-time charging control node is deployed at Vodafone France and
Sagitel—both of which will offer MMS as a prepaid service. “After
carriers have real-time signaling to see balances, they then can get
into data and content, where all of this is magnified thousands of
times over.”
Data services—whether MMS, ring tones or WAP
Internet browsing—require that charging records from multimedia
messaging centers will have to describe the type of message and the
cost and correlate the records. Mediation will have to identify the IP
address, the type of subscriber, the service plan—whether pre- or
postpaid—and credit limits. It will then communicate with rating to
determine the rate for the requested service.
Carriers have to
be wary of the fact that charging plans will bog down existing NEs with
all that information. In generating billing data, carriers want to make
sure they only send information that the application needs.
“At
any given time, there could be 50 NEs flooding information into the
mediation equipment. Equipment has to be designed to find the right
answers to the firehose-in-your-face requests that flood in all at
once,” says Openet’s Hogan.
For now, existing and emerging
mediation players will have to partner to provide carrier-class
solutions. Mediation will have to have open interfaces to convergent
billers responsible for validation. Data, and applying prepaid billing
models to data, will become a new challenge in real-time billing.
Because of the manner in which data systems generate records for rating
and billing services, they will not handle the prodigious data volumes
that come out of IP systems.
“Carriers have to see it in a lab
to consider the scale necessary for new services,” says Mark Tubinis,
CTO of Watercove, whose GGSN network products are jointly deployed with
Telcordia’s IN components at Orange UK. He believes Orange UK is the
only one with real-time charging in an intelligent network approach. To
manage leakage, carriers will have to change the rate of information
flow, “which requires that they be able to see the services and
policies about how to charge; then, they can prevent flooding mediation
with superfluous data,” says Tubinis. That means systems will have to
“automatically correlate the service information to the bearer
[transport] level, so mediation doesn't have to rely on application
charging information, which sometimes doesn’t come in a timely fashion.”
Since
it largely is the responsibility of the network to convert data and
send traffic through IN and service node systems in prepay,
next-generation systems may employ auxiliary balance management systems
to facilitate more involved rate plans for services such as “broadcast
texting” or “friends-and-family” discounts, where parents have postpaid
accounts and children prepay under the same account, or similar bundles
for enterprise customers—where corporate accounts will be postpaid for
business calls and prepaid for personal calls.
For this to
happen, there needs to be standardization for how billing, IN and
mediation interact in a convergent world. While there has been
standardization through 3GPP for open access to networks, enabling
content suppliers to access systems to invoke transactions, it is still
imperative that billing system vendors be able to open up to real-time
transactions from IN systems. That may be facilitated by such
technologies as CORBA, which will allow some integration with IN, but
IN vendors—though fast and reliable—are not so open.
Lack of Standards
While
carriers know that the traditional means of handling CDR feeds will not
work with real-time transactions, finding “pre-standards” options that
are up to the task will be an evolutionary process.
“Convergent
prepay, postpay billing systems will first exist as integrated
applications using standard network feeds—either directly from the
switch or network elements,” says Drucker. He believes “the lack of
true convergence today is due to a lack of standards.”
Part of
the problem is that network equipment manufacturers build the routing,
aggregation and service control for GGSN and are reluctant to give up
control of the aggregation and routing business.
However, IN
suppliers are taking notice of that need to balance their control over
the network with the fact that operators need real-time elements to
interface with flexible billing.
“IN suppliers have to be more
open and flexible without affecting speed,” says Telcordia’s Cobb, who
notes his company recently formed a strategic alliance with Daleen on
the billing side. “We put external rating and tariffing on to real time
IN or prepay systems, so carriers have more sophisticated billing,
rating and tariffing modules running on IN systems.”
In GSM and
GPRS environments, there will likely be GGSN for content and SGSN for
voice and SMS gateways for SMS and voice switches. “That translates
into multiple points of mediation,” notes Dave Dague, vice president of
marketing for Sentori, which is working with Belize Telecom and other
Central American operators. Sentori has partnered with Comverse's IN
group for real-time rating to integrate prepaid provisioning into
Sentori Captivator customer care and provisioning. “Many carriers,
billing and customer care providers purchase charging gateways from
infrastructure providers. However, that is very expensive when
considering the costs of building out GSM and GPRS. Therefore, a
critical success factor will be for mediation engines to become the de
facto charging gateway, according to Dague. “At that point, carriers
can map APIs to connect to switching and network nodes where data is
collected and communicated to a merged database.”
If mediation
gateways become the de facto charging gateways that reach out to
multiple collection points to correlate information, it will become
imperative that the databases synchronize or that carriers employ
front-end query databases that are accurate for customer care
applications.
In cases where mediation isn’t at the core, it could be IN that becomes the center of real-time charging.
Merging Databases
In
instances where a postpaid parent calls to find out about her prepay
child’s account, it will be a function of command queries to prepay
databases, even though the caller could be a postpaid account. A visual
“dashboard” will have to be assembled so the CSRs can view both the
pre- and postpaid accounts simultaneously.
“Carriers could
implement ‘ghost accounting’ to maintain balances for prepay customers
as they are ported to postpaid accounts,” says Robin Burton, head of
marketing at Cerillion Technologies, which offers CRM and event-based
billing. He notes a “dummy account” could be pulled up when a CSR types
in a phone number for the postpaid customer. “Even if you don’t know
that person as a prepay customer, you can get an anonymous account to
pop up with phone and SIM card details and view the postpaid account’s
credit card or cash payment history simultaneously.”
Those types
of capabilities will make synchronization of the databases the biggest
part of convergence. Data migration will require the creation of
myriads of fields, where account hierarchies will be devised for mixing
and matching. That will require tremendous integration work.
Convergence
of databases will require both billing, care and network expertise,
making systems integration an expensive, yet necessary evil.
“Maintaining
two distinct IT approaches and schedules for upgrades and two sets of
operational procedures can mean it will take 6 to 12 months to get a
new feature or plan rolled out,” says Jim DeNarco, product manager of
CSG’s Kenan prepaid products. The holy grail, DeNarco says, is breaking
the logic of the prepaid system into two pieces—business and session
logic in call control for voice.
In the meantime, the aim for
carriers should be to have control mechanisms that interface with
network elements to eliminate latency when maintaining balances for
each service and subscriber. “When maintaining separate balances for
email, MMS, and push-to-talk for the same customers, carriers must deal
with separate and distinct rating mechanisms. Carriers should be able
to take an immediate action, whether for advice of charge, bandwidth
shaping or blockage of service, depending on the balance and the rules
set for that service,” says Milind Gadekar, vice president of marketing
for P-Cube, which offers IN elements that provide an IP overlay for
service control. P-Cube currently is in development with Vodafone (UK
and Germany), Orange and e Plus. “We are developing control mechanisms
for reporting in postpaid and pre-computation and control for prepaid,”
says Gadekar. Currently, P-Cube is working with Hewlett-Packard,
Amdocs, Mind CTI, Openet, and Xacct, to develop joint prepay offerings.
“Service control will be huge for anyone with CapEx issues, as I don’t
suspect carriers will be rushing to replace GGSN with next-generation
GGSN anytime soon.”
Indeed, undertaking this work is much more
than a technology project, as it often is a “transformational business
effort” that fundamentally changes how a business works, says
Accenture’s Drucker. “A completed real-time solution has many network
characteristics that go beyond a traditional IT implementation.”
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