Building the foundation for LTE revenue
April 23, 2013 - Aleks
With 100 million LTE subscribers in 2012 and 381 operators currently investing in LTE in 114 countries (source: GSA), LTE has been growing much faster than predicted, driving increases in volume, complexity and use cases. For both 3G and LTE operators to maximize revenue, it’s paramount to put in place the right revenue-generating infrastructure now in order to make the most of LTE speeds.
The speed and data-led services that high-speed networks like LTE drive present a challenge to legacy intelligent network charging and billing infrastructures, originally designed for simple voice transactions. These systems have found themselves quite limited in their ability to cope, let alone to provide the flexibility, real-time capability and support for innovation that operators require in an increasingly data-centric world. Further challenges (e.g. slow time to market) are also derived from the silos based architecture of most legacy infrastructures, with:
- Postpaid billing systems, consisting of mediation, rating, billing, which are typically batched, software based and residing within the IT domain;
- Intelligent network prepaid charging platforms, which are hardware based and were introduced a number of years ago within the core network to provide the real-time capabilities needed to manage, rate and charge for traditional voice services.
These limitations directly affect operators’ ability to quickly and cost effectively create innovative revenue streams and provide a seamless revenue-generating experience to their customers. Convergent real-time charging systems have therefore been introduced to enable operators to better monetize data and their overall services.
As voice over LTE is introduced, operators would probably not want to maintain legacy IN charging systems which are mainly good for traditional voice services but inherently inadequate to handle data, VoLTE being a data service.
Operators need to review their current IN charging and billing infrastructures in light of their strategic goals, taking into account upcoming VoLTE services. The time for this is now to avoid further investments in already costly IN platforms that are not adequate for their most lucrative and soon only source of revenue – as everything becomes data.
Many operators have already taken steps to evolve their legacy charging infrastructures to better monetize LTE. For example, in North America, Bell Mobility had put in place the right infrastructure prior to evolving to LTE, with a scalable, real-time charging infrastructure to roll out a broader array of personalized prepaid and post-paid services. This new deployment was a key enabler for revenue growth for Bell and consists of a 3GPP compliant online charging system, which incorporates convergent real-time charging, rating and balance management.
The 5 pillars of LTE revenue generation
The question is how to evolve legacy charging and billing infrastructures to build the foundation for LTE revenue and more effectively monetize the rising demand for high speed data. To achieve this, operators need to build a flexible infrastructure based on the following five key pillars:
- The central pillar of high-speed data monetization: real-time chargingIn the era of high speed data, increasing competition, and ever demanding customers who want it all now, real time charging is truly not optional. It is not only a necessity but also an opportunity to create more revenue streams from both prepaid and postpaid customers.
- Enabling context-sensitive offers and VoLTE: real-time charging integrated with policy controlWith the rise of high speed data, operators not only need to create more innovative services and charging models but also these services need to be more personalized taking into account the customer context (e.g. usage, location, time, personal information) – truly value-based dynamic services. Information on the subscriber can also be used to dynamically allocate network resources and charge appropriately. Furthermore, to ensure a high quality voice service, real-time charging integrated with policy management is required to manage unpredictable mobile resources associated with each VoLTE call, while simultaneously ensuring the charge is based on voice call rates rather than data consumption.
- Understanding customer behavior and context: real-time intelligenceThe first step in enabling dynamic services is to understand customer behavior and context by collecting usage data through on-line mediation. Traditionally customer usage information is collected by mediation, passed to charging or billing and then sent to a batch based data warehouse for analysis for use in planning and forecasting. This approach works well for strategic intelligence and reporting. However customer intelligence on mobile data usage and behavior needs to be real-time in order to make context sensitive marketing and up-sell offers.
- Offering the ultimate purchasing experience and stimulating spend: on-device sales/purchaseSubscribers crave for freedom and control over their services/budget. This is the key to keep them loyal and make them feel comfortable and happy to spend more on data services. Being able to communicate context-sensitive offers, providing customers the freedom to purchase and activate the service at their own convenience, then giving them real-time visibility over their usage/spend – all directly on the device – create unprecedented customer satisfaction. This can also reduce back-end customer care costs for operators with less bill-shock complaints and more self-care.
- Delivering real-time charging to all customers: convergence and ease of interoperabilityConvergence is fundamental to fast time to market but also to enabling more flexible business models and a seamless customer experience. With an evolved charging platform that allows multiple services to be delivered to all customers over different networks, operators will finally break down all the legacy infrastructure silos whether prepaid/postpaid, data/voice or fixed/mobile. This means more flexible bundles and a unified view of all services. This also means reduced total cost of ownership with a single solution to enable all their service launches regardless of the network access technology.
Given the challenges operators are facing with their legacy, distributed IN charging and billing infrastructures, they are compelled to evolve these infrastructures in order to more effectively monetize the rising demand for high speed data – with value-based dynamic services for instance. A flexible infrastructure with real-time charging as a central pillar, combined with policy control, on-line mediation, on-device sales/purchase capability, and that offers convergence and ease of interoperability provides the foundation for LTE revenue generation.