The challenges of next-gen IP services

Rapid migration to next-generation IP-enabled services has made charging strategies increasingly important. Service providers should offer flexibility in the way subscribers consume services, their payment options and the way that charges are structured. One of the biggest challenges is to recognize and evolve new business models and the associated flexibility required of back office OSS/BSS applications.


Market volatility, cost pressures and technology advancement have left many service providers facing difficult choices. New competitors are beginning to carve out slices of the market and next generation-enabled services and convergent technologies are combining to pressure incumbent service providers to accelerate the rollout of new services as cost effectively as possible to sustain their competitive position. Service providers find themselves facing major challenges with respect to product, marketing, customer management and investment decisions.


A key focus is to create more innovative and flexible service bundles and gain a better understanding of the source of value creation. Central to this is the development of a compelling service deployment and charging strategy - delivering and charging for appropriate combinations of services, across possibly mixed network environments, to a range of different customer segments, supported by payment choice.


Today, consumers can access voice, data and content using a bewildering array of access options. Consumer-targeted content and commerce creates complex revenue streams involving multiple partners in the service delivery chain.


From a charging and revenue management perspective, a number of issues are apparent, including what charging models to deploy to enable subscribers to access and pay for content and data services, what settlement models to use to ensure adequate revenue share between content partners and service providers and how to integrate customer experience management as part of the revenue model.


High performance environment


It is important to create a high performance environment for the control, delivery and charging of advanced services over multiple networks. Service providers must evolve and adapt to meet the content-centric needs of customers.


They must dramatically reduce time to market, and activate those services in real time to ensure customer satisfaction. They must also evolve pricing schemes, offering flat-rate and volume-based tariffs, QoS-based charging, innovative bundling and discounting.


Charging parameters now become part of the service itself, with real-time transaction management, improved customer interaction and active marketing strategies driving on-demand consumption and interactive options to encourage usage and raise ARPU and AMPU (average margin per user).





Service innovation often involves creating a broad ecosystem, which may include hundreds of content delivery partners. The proliferation of content offers the opportunity to create compelling new services for subscribers. Consumer behavior is also changing - from consuming passively to being involved in the creation and production of digital content itself.


To capitalize on these opportunities, service providers should have a highly flexible infrastructure to deliver customized services to ever-smaller consumer micro-segments in real time via automated interactions and efficient service management options.


They should enable real-time transactional control and charging of all data, content and commerce services; introduce charging of services based on event type, data volume and customer experience; ensure bi-directional management of user-generated service requests; mitigate financial risks with variable, real-time credit supervision for all subscribers; introduce new charging services, flexible rating and customer loyalty schemes; offer transparent charging models; and introduce dynamic account selection options.


New business models


The business models, rather than the enabling technology, that service providers adopt determine their success or failure. They must embrace new business models that can offset the price erosion of legacy services and compete against new innovative market entrants.


New business models must be created to address issues of user acceptance of content services as well as the more technical and creative considerations such as different advertising formats and techniques.


If service providers will deliver combinations of fixed and mobile voice communications, television, and broadband services over IP, they also need to adopt a more collaborative approach to the integration of services and technologies and manage a dynamic portfolio of services, while continuing to maintain all the necessary controls and best practices associated with revenue assurance and settlement.


When introducing high-value data services, new complexities and risks for technical environments and charging models are added.


The management of premium content services has become complex primarily because the diversity of services available has introduced a large number of retail pricing models. Service providers must offer new types of pricing models, tailored to more specific user groups. This requires incredibly sophisticated business intelligence, as well as an understanding of how to extract granular information.



Another challenge is the extension of interactivity to subscribers. New services introduce new pricing challenges with several media contributing to the cost - creating an uncertainty for the customer as to the actual price he/she may actually be paying for a particular service. This makes it necessary to offer the end-user as much control as possible over their spending and consumption of services, while reducing the risk of exposure to fraud. Many legacy BSS/OSS do not support these new interactive requirements.


To overcome legacy shortcomings, a real time bi-directional capability is required to sit between the network, OSS and BSS domains to manage and control access to services based on user profile information, and invoke an interactive dialogue with the user.


This can be achieved using a specialist IP adjunct mediation rating and charging application, to manage high availability and minimal latency for service delivery, which complements existing BSS infrastructure investments. For this approach to work, the adjunct solution must be able to work with existing OSS/BSS solutions.


As they develop an IP-enabled service portfolio, they will require advanced real-time IP mediation, session management, rating and charging elements that fill existing gaps in their OSS/BSS architecture, but do not unduly disrupt existing BSS/OSS infrastructure and revenue streams.