Managing the monetization of lifestyle services

Communications service providers (CSPs) across Asia are racing to get their networks ship-shape to support the capacity and flexibility demanded by higher-bandwidth data and content services.

A report by ABI Research concluded that global capital expenditure on mobile communications exceeded $131 billion in 2007, and would reach $163.5 billion in 2013. The report predicted that much of this spend would be in Asia Pacific, driven by the expansion of current 2G networks and the rollout of 3G.

Technologies such as HSDPA are becoming more established, significantly boosting capacity and network performance, such that the much vaunted content-rich, more lifestyle-oriented services are now heading for a phone near you.

Meanwhile, today's consumers have become very demanding - they are accustomed to choice and flexibility in their lives and they expect CSPs to deliver the services they want quickly and efficiently.

As more and more customers demand these lifestyle services, the big challenge facing CSPs is going to be managing their monetization - this will include everything from managing business arrangements often within new and unique business models, processing data of varying kinds across multiple networks and from different devices, rating and discounting, and of course, reconciliation and reporting to an ever-extending and diversifying value chain.

The big change for CSPs lies in the extended value chain created by involving the numerous new content and application vendors required to deliver this new set of services that customers will be demanding. This is fundamentally changing the relationship between service provider and content and application providers.

The key impact of this is that interconnect becomes infinitely more complex. In today's market, CSPs deal with simply voice and SMS data and manage interconnect between carriers on a local and international basis. In tomorrow's world, CSPs will be dealing with a much broader array of content types and formats and managing interconnect between an ecosystem of partners that includes and extends well beyond fellow carriers.

Server vs network

Most CSPs are set up to deliver a one-size-fits-all approach to services, and their networks and systems obviously reflect that. They are accustomed to delivering services such as telephony that come from the provider's own network rather than content and applications that come from a third-party's server. Tomorrow's services will be made up of many different parts delivered by many different participants in the value chain.

CSPs need to adopt OSS and billing systems that can efficiently track and measure the usage of services across different networks and to different devices, while simultaneously managing the reporting and reconciliation needed to allocate the resulting charges accurately to each of the involved parties.

For example, let's say a customer is watching Tyson Gay compete in the 100 meter men's final in the 2008 Beijing Olympics. While watching the build-up, the customer responds to an onscreen ad for a new energy drink and, just following the race, responds to an ad from Adidas, the sprinter's main sponsor. The CSP, which manages the billing relationship with the customer, suddenly has to send a bill not only for the usage time for watching the final, but maybe also an on-demand charge, a soft drink and a pair of running shoes via Amazon.


The CSP must now figure out how to get each participant's share of that revenue back to them, accurately and efficiently.

The efficient management of the monetization of new services and applications is absolutely essential to CSPs being able to innovate and roll out new services to customers in a cost and time efficient manner.

Be flexible, continue to adapt

To cope with this new world order, CSPs must have an OSS/BSS capable of delivering flexibility now, and adaptability in the future. Only by accommodating the rapidly transforming telecom landscape can CSPs expect to survive and prosper.

With CSPs still expected to get innovative new services out to market in a timely and cost-effective way, the increasingly complex and extended value chain will challenge CSPs to manage two-way payments, with content and data flowing through multiple networks, systems and businesses. The challenges to interconnection and settlement are plain.

Rather than being the transporters of an end-to-end service, CSPs need to think of themselves as connectors, as networkers linking providers of content and services with customers, and managing the delivery and charging of that service.

Today's forward thinking CSPs are waking up to the challenges brought on by a continually and rapidly evolving industry.

The one-dimensional, stable relationships CSPs used to have with customers and partners are giving way to a new set of rapidly developing, extremely complex inter-relationships involving an array of suppliers, content creators, device manufacturers and network providers. Tomorrow success stories will be led by those CSPs that quickly adapt existing networks to this new world order - and even more importantly, figure out how to efficiently manage the mediation and charging for this new breed of lifestyle services.

Joonas Ojala is interconnect product manager for Comptel Corp