During the late 90s, time to market used to be the key word to define mobile operators' strategy for new services deployment. The rapid success of GSM was based only on voice and competition was strong among mobile operators to keep their subscribers captive with new services.
In the beginning, only a few services were launched and mobile subscribers focused on these services (for example SMS). A small number of new services and mass market usage led to a fast return on investment. So focusing on time to market was the right strategy.
Since the launch of 3G, mobile subscribers have to choose between a large number of candidate services and the return on investment for each service is harder to obtain.
In this context, time to market is still an important factor of success for new services, but it is no longer the only one. Mobile operators have to face a new challenge: charging the right customer the right price for the right service, which of course, also means building the right charging architecture.
The move from usage to bundles
The increased number of services introduces complexity into charging: how to charge for each service‾ What type of charging: event, time or volume based‾ How can offers be attractive for all services‾
However, the number of new services is not the only reason for the increase in complexity. Service usage, for example, is moving from individual usage to community usage. One family may share the same account for the charging of services that are used by the whole family. Models of community can be quite complicated with groups composed of prepaid and postpaid subscribers.
The challenge for the operator is to attract customers to these new services and to keep customer satisfaction as high as possible. For this, operators must avoid scaring their customers with complex tariffs and offers.
Customers need to feel comfortable with the charging of new services. Charging should always appear to them to be simple and easy. Customers should never be unpleasantly surprised by their bill: the amount charged should correspond to what they expect.
If customers are lost in tariff models or if they have the feeling of being overcharged, they will reject the new services and complaining.
To face these charging challenges, old charging models based only on usage (price per minute, price per SMS"&brkbar;) are no longer sufficient.
The charging solution for new services introduction is probably in 'bundles' of services and 'group offers' (preferential tariff inside a group, bundles shared between group members).
These charging models provide customers with attractive offers, encouraging them to increase service usage, and, above all, giving them confidence in tariffs by providing them with a clear understanding of what they are paying for.
Of course, the introduction of enhanced bundles and group offers (made up of prepaid and postpaid subscribers) also requires an evolution of operator legacy charging architecture.
Optimizing the charging architecture
The required evolution of operators charging systems to integrate new services and new charging models presents operators with difficult choices.
It seems that the time has come for mobile operators to move to a convergent charging architecture and to 'hybrid networks'.
Convergent charging architecture has been standardized in 3GPP. It provides a highly flexible solution for enhanced tariff models, and for rapid introduction of new offers.
One key advantage for operators to introduce a convergent architecture is to get a common charging system for all services and customers (prepaid and post-paid).
Convergent charging offers an easy way for bundle creation and group offers.
Hybrid networks have been chosen by some operators that wanted to avoid the heavy cost of a billing system migration: they decided that the right strategy for them was simply to keep their legacy charging architecture for current voice offers and to migrate all the other services on a flexible and convergent charging platform.
The hybrid network concept is quite obvious: investment is only done where it is needed. There is no need to change or modify what exists as long as it works satisfactorily.
Hybrid networks allow operators to smoothly integrate new technologies with their legacy charging system. New charging solutions and models can, therefore, be deployed only for new services (web, content download, video streaming"&brkbar;), new types of offers and targeted classes of subscribers.
On top of convergent charging, hybrid networks provide an optimized and flexible charging architecture for an effective 3G architecture.
Thierry Lafue is head of marketing and pre-sales a Evistel, StÅ½phane Bureau is the company's product manager