Operators should seek unified real-time charging, policy management

September 22, 2010 - Openet


In writing a guest column for Telecom Asia’s next billing supplement, I was asked to look at how operators there were approaching tiered billing as compared to their North American counterparts. By mistake, I found that there is a growing need in both markets for unified solutions that integrate policy management and charging platforms.
The more I looked into trends in both markets, the more evident it became that very little policy management will be deployed absent of real-time charging.
Evidence of the need for both real-time charging and policy in one solution is not hard to find. The Wall Street Journal reported that seven of the top 10 TV operators are building TV Everywhere services (like Hulu), or innovation with business models triggered by the iPad make it obvious that being nimble enough to adjust policies and pricing according to analysis of consumption patterns and usage habits will necessitate some sort of true convergence of real-time charging and policy management on a broader basis than what is apparent today.
There’s no doubt customers will increasingly want data plans and services tailored to their personal needs, as opposed to long-term service contracts that offer access to content — much of which does not meet their needs or desires. That’s why Verizon, AT&T, Comcast, Time Warner Cable, Dish Network, Cablevision Systems and DirecTV all have devised strategies around apps for tablets, smartphones and PCs to compete against the video applications offered by TV networks and the likes of online players like Netflix and Hulu.
As service providers try to figure out how to compete with, beat out or complement over-the-top players, they need more personalized and specialized content and features, which means they need integrated policy and real-time charging.
“If you want to give a subscriber the choice to either buy a movie from HBO for one view or to pay for 100 days of HBO, you need sophisticated charging; but if you want location-based controls so that a parent can limit a child’s SMS usage at school or if you want time-of-day or device controls, you need policy,” said Mike Manzo, chief marketing officer for Openet, whose software platforms were used to launch and monetize the iPad for a major North American Tier 1 operator.
What’s interesting about that case study is that 30 days after the launch, the operator (we’re not supposed to say it but you can guess who) replaced its $30 unlimited usage plan with a $25 plan that allows 2 gigabytes of volume (or 30 days) before renewing automatically.
That is an interesting use of charging and policy, as the operator was able to see (through analysis of aggregated data) that its unlimited plan was causing too much usage in the 30 days and that it would impact profitability, which then caused its marketing folks to change their minds about how to best pursue pricing and initiate what probably will eventually become more-sophisticated tiered pricing based on policy enforcement around usage habits and patterns.
The point is, service providers need to be agile enough to create new business models on the fly and to watch what happens in their networks and how their subscribers are using services.
“That type of control, monetization and visibility will be possible only with an evolution in the types of solutions operators use today,” said Manzo, who next week will launch a blog to urge operations/business support systems players, including its own competitors, to move toward more integrated, unified solutions that work toward “subscriber optimization” as a next step up from what has been touted by many as “transactional intelligence.” When it comes to beating out encroaching OTT players, there has been plenty of conjecture about what should happen to help telcos survive or even thrive, but not a lot is happening yet in terms of integrating policy management and real-time charging. But there is some movement.
Amdocs, for one, is reselling transactional intelligence with its OpTier Business Transaction Management, and there have been some prepaid billing players like Ericsson that incorporate policy controls. Then there are those in-network vendors that also talk of having unified solutions that include policy management and real-time charging, such as Camiant (now Tekelec), Comverse, Brigewater, Huaweii, Alcatel Lucent and, of course, Broadhop (primarily in cable). Throw in players such as Redknee, Comptel, and Volubill — all of which talk of unified or integrated solutions — and there’s quite a lot that can happen in this landscape.
With so much going on from so many players, operators should seek out high-performance, scalable engines (after all, we will be talking billions of transactions) that can interface upstream to network equipment as well as downstream to databases and back-office systems. Unified solutions should be able to watch traffic on the network and be able to determine which traffic ties to users. The solutions then should use contextual information derived from back-office systems. They should also be extensible for future-proofing because who in the world can predict what will be hot two years from now?
“What we don’t want as an industry is to give operators a hodge-podge of poorly integrated solutions,” said Manzo, who warns against “veneer engineering,” where policy management products are thrown together with charging as opposed to being built from the ground up with a unified platform or engine for both policy and charging.
Manzo believes a unified suite should empower service providers to grow revenue and avoid disintermediation with three key capabilities:
• Gain visibility into customers and how they use services across capabilities like service assurance, billing, audience management (e.g., subscriber data management, analytics);
• Create new biz models (monetize services with flexibility for things like autorenewal, flexible payment options like credit cards and no contracts, notifications of thresholds for top-up or service upgrade opportunities);
• Enable operators to monitor and influence in a context-aware manner the subscriber and session, as well as the allocation of resources


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