In many countries in Asia, mobile service providers are still in the enviable position of experiencing a continued growth in subscribers. However, other markets are rapidly maturing, and now the challenge is both to retain customers and grow ARPU. One common thread uniting growing and mature markets throughout most of Asia is that the growth in revenue comes overwhelmingly from prepaid customers. This creates specific challenges on many levels, but possibly none greater than charging for services. Getting that right is clearly fundamental to revenue growth.
The prepaid model is one that makes absolute sense from the consumers' point-of-view, as it allows them to be in control. It also makes sense for service providers as it enables them to control credit risk and fraud. But that depends on having the right charging infrastructure in place to enable full-service offerings for prepaid users and to ensure no revenue leakage occurs.
This issue of revenue leakage is becoming all the more important as service providers aim to grow revenue by bringing to prepaid customers the full palette of service offerings that are currently being enjoyed by post-paid subscribers. Whereas traditional prepaid systems only had to contend with voice and SMS, they now need to be able to handle data, video, content and other new lifestyle services.
Traditional circuit switched prepaid systems quite simply don't provide the required flexibility, especially when one considers new charging models (bundles and promotions) that will also need to be accommodated. This is why online charging solutions have become so important to service providers across the world, but in Asia in particular.
Online charging solutions manage the whole charging process as the service delivery takes place, not after, as so-called hot-billing solutions do. This involves authorization, rating the service, managing a balance (monetary or other), as well as controlling the service delivery and enabling or denying services based on balance status.
The benefits of online charging extend beyond simply handing prepaid converged services. They also include the ability to offer online cost control for post-paid customers. Online cost control helps overcome what is known as bill-shock, which is a major reason for users refusing to adopt new services in the long term, and can even be a cause for churn.
The unfamiliarity users may have with new lifestyle services and related pricing models means that it is much more likely that they will exceed anticipated costs. This can be exacerbated further when they are trying these while travelling.
In each case, the result is that the customer may be shocked by the service bill. From an operator's point of view this outcome can be the death knell for new service adoption. Online cost control means that the customer is able to track costs and avoid bill-shock, meaning that they are more likely to continue using the service.
Many service providers are considering IMS as the new service delivery environment. Once an online charging solution is deployed for the existing service delivery environment, service providers have online charging capability for IMS services as well. Thus service providers are able to make from an online charging point-of-view, a smooth transition from the existing service delivery environment to the new IMS service environment.
As service providers in Asia seek to extend the prepaid model to converged services, it is fundamental that they develop the right infrastructure for charging. Many are in denial of the extent to which their existing charging platform is simply inadequate to handle the challenge. At best, this means that service providers will find their competitiveness eroded, as they are unable to offer the charging flexibility expected from their customers. At worst, the lack of an appropriate charging platform will result in very serious revenue leakage. Clearly, it is time for service providers in the region to wake up to the challenge and adopt online charging solutions.
Simo S‾skilahti is senior vice president, convergent charging business for OSS vendor Comptel