Converged charging: Hidden gem of effective 5G monetization

Communication services have evolved at a much faster pace in the past 10 years in comparison to the initial 30 years. It started with simple SMS and Voice connectivity and now data communication services have started taking over. It all started with some data to consume and now it’s about how much data you can consume. 5G took the game to the next level where the volume of data, quality of service, and connectivity for enterprise converged.

Now the big question is how we are going to monetize the various aspects in a single converged charging stack.

This expansion of service offerings has a huge impact on the underlying platforms. With additional data, services come additional network capacity investments and extra capabilities are needed to be added to the BSS platform.

The operators are needed to modify the way their work especially the billing system to cater for the new types of services while improving the customer experience.

But, as a TSP (Telecom Service Provider) you might be thinking why do you need to transform the billing system when you already have one.

Here’s when you need to pay attention to the fact if your current billing system is fit for the new charging models…

TSPs work with different billing systems like one for mobile services and the other for xDSL services. If we talk about an ideal billing system, then it must be able to charge all the services, regardless of the underlying network technology. To do this, the TSPs need to follow the path of becoming Digital Service Providers (DSPs). The other reason to go for this is heavy competition in the market due to which operators are forced to shorten the time-to-market for new services. Considering all this, operators are now being pushed to transform their billing system into a more convergent one.

CSPs on the path of advancement(5g)

As CSPs prepare for enhanced engagement with the digital economy and are on the path of becoming digital service providers themselves, it is even more crucial for them to break down the architectural silos. They need that their solutions are flexible enough to support various business models and also the correlated charging and billing models to drive new revenue opportunities. These solutions must be open to allow CSPs to digitally communicate with clients and customers. Apart from this, business agility is needed in order to bring highly dynamic digital services to the market. And all this should be delivered with greater operational efficiency to support the immense growth in data and devices at lower costs.

Inhibitors for converged charging systems:

Though, CSPs have delayed the adoption of such systems in the past few years for a variety of reasons. Some of them are:

1. Complexity: The old school legacy infrastructures are highly complex and delayed CSPs transformation initiatives due to the attached risk of disrupting ongoing business operations.
2. Cost: The cost of deploying a unified charging system was indeed excessive compared to the anticipated from such an exercise. The issue is that CSPs viewed the transformation as a cost-saving exercise instead of an exercise to support new revenue growth.
3. Uncertainty: The uncertainty in the market regarding the evolving architecture frameworks like cloud-native models has also made the CSPs delay investing in such systems. Businesses prefer to wait and get some clarity on emerging technologies rather than investing.

Risk Appetite: Generally organizations aren’t able to maximize the amount of residual risk they can accept. Thus, they stay in the safer zone and hesitate to shift to convergent systems.        

Drivers for converged charging systems:

Due to the high impact of digital transformation on the way CSPs approach their systems’ architecture, CSPs are up for unifying their charging systems. The primary drivers behind this shift are:

1. Agility: As the digital transformation has now become the centre of attention, CSPs are trying to take leverage of this opportunity to offer novel services to potential customers in the market. Business models are swiftly evolving and various CSPs are falling behind in their ability to constructively support and monetise new use cases. This is where agility comes into the picture because businesses need a system that is scalable, flexible and comes with an extendible architecture framework that can instantly respond to the constantly varying market conditions.

• New Revenue Opportunities: A unified charging platform will drive new opportunities to cross-sell and upsell and also to enhance average revenue per user. Furthermore, with partner enabled services comes better growth and loyalty for the CSPs allowing seamless onboarding and settlements. This creates the need for a software-driven framework that is interoperable with other networks and platforms.

• Cost: Charging and billing systems account for a large part of the entire maintenance and support expenditure due to the continued use of legacy systems. Based on Analysys Mason’s annual revenue management market share data, the support and maintenance of existing billing and charging systems accounts for over 70% of the total spend on billing and charging systems. It is one of the biggest concerns for a CSP, as these resources can be used to support a broader digitisatioprogramsam.

Conclusion

With time telecom sector has become more customer-centric than ever before. The customer experience is the primary focus and the most effective weapon to win the competition. Though there have been challenges, additional business opportunities are also there that provide new personalized services to the customers. To use such opportunities, the underlying billing system should be capable of enabling new bundles and services while ensuring a shorter time to market.