The convergence of the Internet with wireless communications, mobility and media services and broadband technology creates enormous opportunities and challenges for mobile network operators (MNOs) and mobile virtual network operators (MVNOs) alike. This convergence will create many new revenue management challenges.
New business models built around content and value represent a departure from service usage business models. To run a mobile business in this environment, MNOs need to be confident that their BSS and
BSS/OSS needs to be more flexible and scalable. They must also provide real-time transaction management and processing capabilities in support of m-commerce integration with its associated revenue-share business models.
The introduction of prepaid services has been crucial to the rapid growth of the wireless industry. MNOs have always acknowledged the massive subscriber growth potential offered by prepaid services. Now they are recognizing the revenue potential, as well as the need to better understand the requirements of prepaid subscribers.
This new appreciation requires innovative types of relationships between MNOs and their subscribers, so that innovative and flexible service offerings can be marketed to ensure greater loyalty, up-sell and churn reduction.
The majority of prepaid voice and data delivery systems continue to use an intelligent network (IN) architecture for subscriber balance management. Traditional "hot billing" solutions are no longer deemed acceptable as there is a time delay between an event occurring, and the call record being mediated, rated and debited from the prepaid balance. All prepaid services should be subject to real-time pre-event authorization by a rating and balance management platform of some type.
The "now-pay" concept
The divergence between prepaid and post-paid subscription models is as much a result of technical considerations as of commercial strategy. Traditionally, revenue management systems operate in batch mode, and are unable to support the real-time call decisions required by the prepaid business model.
A combination of new technology and new process models now render it possible to remove the barriers to the separation of prepaid and post-paid subscribers, which has not made business sense for some time.
MNOs require the best of each payment approach to effectively manage their businesses, reflected in the emergence of a new payment category associated with m-commerce: "now-pay" transactions, where a transaction request, authorization and payment takes place in real-time.
Requirements have evolved stipulating a single view of all transactions to help provide superior customer care and improved operational efficiency. The multi-service nature of new generation networks also means that concurrent voice, data and content services need to be supported in real-time on the same account.
This combination of diverse payment methods and converged and combined services demands an accommodating revenue management system - not just a revenue system to manage account receivables, but one that supports real-time mediation integration and offers flexible rating, guiding and discounting while running in real-time via highly available, distributed server configurations.
Better revenue management
Circuit-switched telecom operations have long used tariff models based on call duration, time of day and distance. Next generation BSS/OSS should support the types of flexible business models necessary to support content and data services, enabling both revenue share models with content providers as well as protecting intellectual property rights.
The traditional telecom service delivery model, whereby a network operator delivers communication transport services to an end-customer base, is dramatically expanded when the delivery of content from external providers and aggregators is added.
Content-based products and services offer MNOs an effective means of differentiating themselves from their competitors as well as increasing their revenue base. With these come the challenge of managing a diversity of business models and a multitude of partners.
While traditional services allow subscribers to have single-session access to a dedicated pool of funds associated with payment for a service, next-generation services may require not only multiple, simultaneous sessions from a single device but also the possibility of multiple, concurrent users accessing a single pool of funds in real time.
Walled garden and open garden models
In the "walled garden" content delivery model, the MNO provides all content via access to their portal site. The standard walled garden revenue flow will be from operator to content provider and from subscriber to operator.
There may or may not be a one-to-one relationship between the wholesale and retail transactions. There are variants to this flow that could include more complex revenue-sharing agreements and sponsored advertising arrangements.
The advantages of the walled garden approach for the operator are that the operator retains complete control over the customer relationship, pricing, branding and delivery of the content and that the revenue flows can be relatively straightforward to manage.
As the operator maintains the pricing, funds authorization on a prepaid subscriber account takes place entirely within the operator's trusted domain.
With the open garden approach, content can be delivered via content providers and aggregators that reside outside of the operator's infrastructure. While access may still be via the service providers' portal, this approach enables content providers to maintain their own pricing and branding. The MNO is effectively providing a "channel to market" for the content provider.
The MNO is also well positioned to perform the charging for the content and other value-added services on behalf of the content provider, such as user authentication, transaction authorization and quality of service monitoring and charging.
As the content and the number of content partners can change more rapidly in the open-garden approach, the wholesale revenue flows associated with this are likely to be more complex, requiring real-time or near real-time multi-party revenue share and conditional settlement schemes, in addition to real-time funds authorization against a subscriber's prepaid account.
A key technical challenge is enabling secure access to the trusted domain of the MNOs' network and BSS infrastructure for the purposes of funds authorization.
Industry initiatives such as OSA/Parlay and the Open Mobile Alliance (OMA) are focused on providing a standards-based approach to third-party authorization and content charging. This has been achieved by specifying an application-level authentication and authorization framework that is hosted by the network operator, acting as a gatekeeper function to external content servers.
Such a model allows content providers to concentrate on developing content and service providers to focus on building profitable content partner relationships and capitalizing on the joint advertising power of their own brand combined with the content provider's, rather than diverting resources for costly systems integration.
BSS/OSS for next-gen services
To maximize the subscriber relationship, a unified approach to customer care and subscriber management, with a single point of control, regardless of prepaid or post-paid subscription type is required.
This should support service authorization in real-time to ensure the best subscriber experience and to provide revenue assurance control that will protect a service provider's liability to its content partners.
There should be dynamic account selection to enable subscribers to control which of their accounts is used on a per-session basis, as well as service-specific spending limits allowing subscribers to specify spending limits and account guiding, thus putting them in control of their own accounts.
The system should support advice of charge, giving subscribers the confidence to make use of services, and also real-time charging and billing to enable creative pricing strategies and protect the service provider from revenue loss, including fraud.
The BSS/OSS should be able to calculate discounts and volume-based charges for prepaid and post-paid subscribers. It should support high availability to ensure consistency between the IN-based call control and balance management elements and the customer care and billing system infrastructure
Operators should not shy away from exploring the value of the trusted relationship with their subscriber base and taking an active role in the content delivery and charging process - to better understand not only the commercial and technical challenges involved, but also the massive potential revenue and margin benefits associated with the provision of next generation services.
Ben Bannister, product marketing, charging and billing, Intec