DISCONTENT WITH CONTENT

There is no single answer to the question of how best to bill for advanced data services — heretofore referred to as content. That is, if the question is meant to solicit an answer that provides a technology solution. But if the question is taken at face value, the answer supplied by Alan Liu, associate director at Bell Mobility of Canada, is as good as any.

“We don't do something if it doesn't make sense to the customer,” Liu said. That “something” his company won't do — which is a good formula for other operators to follow — is to institute convoluted pricing schemes such as paying by the packet or for different service levels, neither of which, Liu said, the users of new content services are ready to deal with.

The best technology answer to the question then becomes not which solution provides the best pre-pay or post-paid system, or the best rating or mediation engine. It isn't about which system can do real-time compensation or reconciliation better than the next, although these capabilities are important. The answer is which solutions provide the most flexibility for letting the wireless operator decide what pricing scheme or bundle is best on any given day, for any given customer, for any given service.

And the answer couldn't come soon enough. A survey by The Yankee Group last year said that two-thirds of operators blamed their billing systems for making them hold off on deploying pre-paid wireless data services. The story in 2004 looks different.

Here's how Canada's largest wireless operator, Bell Mobility, and two of the leading vendors, Amdocs and Convergys, are dealing with the new challenges presented by the complexity of supporting wireless content.

Bell Mobility launched its CDMA 1xRTT data network almost two-and a-half years ago, offering mainly a mobile browser service. But it wasn't until the company deployed its Event Access Manager (EAM) in May 2003 that it was able to deliver a wider variety of content and begin to deliver it profitably. Bell Mobility turned these content-based services into revenue generators by using the EAM to find a pricing methodology that worked for the customer yet still allowed the third-party content provider to identify and exploit the value in their content.

In addition to Web browsing, Bell Mobility now offers ringtones, picture messaging, various downloads, premium short message services, a Java vending machine for downloading applications, location-based services and roadside assistance. It also has developed relationships with companies such as World Wrestling Entertainment (WWE) and Open Graphics for providing and managing premium content.

The EAM that supports these services consists primarily of Amdocs' commerce payment platform and real-time rating engine. Together, Amdocs and Bell Mobility designed some best practices around the platform that they say helps Bell Mobility offer the same content services to both post-pay and pre-paid subscribers and solves the problem of compensating multiple providers.

Using the popular ringtones as an example, Liu said billing problems can occur with either billing format. “If you charge up front, what happens if the customer doesn't get the ringtone?” Liu said. “On the other hand, if you charge at the back end, what happens if the pre-paid customer runs out of balance?”

This dilemma was solved by charging up front and implementing a content repository that stores the data for a specific period of time so the user can attempt subsequent downloads if the initial attempt fails.

“There really isn't any value in a customer downloading a ringtone more than once. So we let them have access to it to make sure they get what they paid for,” Liu said.

Using the EAM, Liu said that most new event-based content can be launched with less than one week of Bell Mobility involvement. And once launched, the prices can be changed at will. This has allowed relationships such as the one with WWE to work because Bell Mobility can adjust prices on wrestling downloads depending on which wrestler happens to be hot at the time — and that changes often.

The system allows Bell Mobility to charge anywhere from $1.50 to $2.50 per ringtone (plus airtime) depending on popularity or a particular partner agreement. The same thing goes for images and screensavers, which go for $1.50 to $2.00 or Java downloads, which command anywhere from $3.00 to $7.00. Other applications like picture sharing command one price for the initial download and $0.25 for each distribution to friends or family.

“If there wasn't a demand for the services, I don't think we could demand a premium for them,” Liu said. “So obviously there is a demand.”

Two new capabilities come to play in the pricing flexibility for Bell Mobility. One is real-time rating; the other is online charging. Together they help Bell Mobility do events-based billing. This type of billing triggers charges based on discreet events associated with value to the customer.

“We want to be able to change the price of content to get better adoption and encourage more usage. That's the advantage of a real-time rating engine,” Liu said.

Events-based billing also solves another issue for Liu. It allows him to offer the same services to both types of customer. “Today we no longer distinguish between pre-pay and post-paid customers except in payment method,” Liu said. “We can make the same content available to both of them.”

Amdocs' Malcolm Dunn, vice president of the company's newly formed business unit focusing on content, sees the same type of demand for content as Liu, but to vendors, demand for these services doesn't grow linearly, it grows in complexity. And that puts pressure on his organization to strike the right chord with operators before that demand becomes unmanageable.

“We believe that as the need for things grows, the complexity and volumes grow. We want to position ourselves so we are seen as the industrial strength infrastructure for this line of business,” Dunn said.

Much of that complexity comes in the number of content and delivery partners involved in providing services and in dispersing the revenue according to various agreements between the partners.

Although Bell Mobility isn't yet using Amdocs' newly launched Partner Relationship Management (PRM) solution, such solutions will become increasingly important to an operator's bottom line and sanity.

An operator's business partners for content services include media providers, content providers, other network providers, dealers and wholesalers — each with their own set of business rules and revenue goals. “When we talk about partners, we are talking about any business entity that an operator is using to extend its own business,” Dunn said. “Operators need very sophisticated types of agreements to be able to negotiate with different partners.”

It will be the job of the billing vendor — soon to be a partner management vendor as well — to not only distribute revenues, but to ensure its primary customer, the operator, gets the maximum take on any such deal.

In other words, an operator may not be able to put the squeeze on a company such as Disney, but can negotiate tougher agreements with small, eager, yet innovative content providers. So the operator needs to be able to manage perhaps hundreds of different agreement types.

Amdocs' PRM solution does more than manage contracts. It may be difficult to tell where Amdocs' PRM solution ends and other systems in its suite begin to contribute, since the company's approach is to provide an end-to-end solution. But the environment in which PRM is designed to work includes service delivery, self-registration and self-help for partners, and inter-partners settlement for content, commerce and interconnection.

“It's [addresses] that massive amount of business processes that goes around the physical act of delivering the service, which is an area that has been missing until now,” Dunn said.

Using PRM, content providers can self-register their application or content and run through the necessary business-rule hoops required by operators before the operator has to get involved. These hoops include providing financial information about the company and the type of content it wants to provide, providing a service description, completing a standard agreement or requesting a custom agreement and suggesting pricing.

“If an operator doesn't have an automated PRM system and relies on spreadsheets, they have to compromise on the type of revenue settlement and can miss out on opportunities to get real revenues for these services,” said Etty Yairi, senior director of product management at Amdocs.

Part of Amdocs' strategy in partner management is to make better use of its system integration capabilities to help take some of that cost burden off the operator. It also ties in with the company's solution suite approach. “We want to create a more pre-integrated solution with a limited number of third parties where we can manage the integration [of new services] out of the box instead of leaving it to the operator or to a system integrator,” Dunn said.

Dunn acknowledged that operators “still don't have an appetite” for big investment for this emerging line of business and aren't likely to implement a full suite of solutions at once, especially at what is still an early stage of mobile content adoption.

Adoption, however, is growing. And so is the investment in mobile content billing solutions. Convergys, for example, recently sold its Infinys rating and billing software for advanced data services to Verizon Wireless.

Verizon Wireless will use Convergys' software to augment its collection of homegrown and licensed solutions — another example of how Convergys' modular approach to selling software is paying off.

While Convergys has a PRM component to its Infinys product that facilitates relationships, the company is focusing more on settlement. “We are focused on rating, billing, credit management, revenue assurance, settlement of funds and any other debt-related financials or payments,” said Paul Hollingsworth, director of product management at Convergys.

Hollingsworth said that the challenge for all parties in collecting revenues is tied to where the debt risk actually falls. “If an operator loses 100 minutes of usage, that isn't a great credit risk. However, if it sold $100 worth of content and the customer doesn't pay up, the operator may have a liability to the content provider. So there is more risk.”

Convergys' forte is in managing that settlement. It is doing so by providing real-time rating and online charging capabilities. And one of the benefits to solving the settlement problem is that it gets an operator out of the flat-rate trap.

Online charging treats all subscribers the same, a requirement for North American operators rolling out data services. It also pre-authorizes purchase transactions to protect the operator and its content partners.

Convergys' real-time rating engine lets the operator check a user's credit as they are requesting a download. And it is different from typical data rating solutions. Where rating engines for typical data have historically been passive systems waiting for an event to occur, the real-time engine must be active at all times.

“A content provider's settlement window is usually not the same as a consumer's billing window, so we have to be able to compare the two at any point during a user's use of a service,” Hollingsworth said.

Eventually, real-time rating, online charging and partner management will allow another layer of flexibility in billing for content. Technically, the capability is ready today. However, the consumer isn't. That layer is quality of service (QOS).

European operators have gone further down the road in tackling the issue of billing based on QOS than U.S. providers. “We've been under the flat-rate pricing and bucket plans for too long,” said Rick Findlay, director of wireless industry solutions at Convergys.

However, Findlay said when U.S. providers get away from the flat-rate trap, consumers who were never concerned with a few missed basketball scores or other services because they were all part of a bucket plan, will think about QOS when they start to exceed those bucket plans because of poor transmissions. “That's when QOS will mean something to them.”

Bell Mobility's Liu admits that billing based on QOS will be important one day, but at this stage is something that neither he nor his customers are ready to tackle. “We haven't launched any services yet that require QOS,” Liu said. “We don't want to confuse the user by adding another metric. We don't want to charge for it when the customer doesn't understand what it means.”

With the type of content Bell Mobility provides today, it is able to put the burden of QOS on its content partners. “We always make sure they design their applications in such a way that the customer is guaranteed delivery. We always collect a yes or a no before a service is delivered.”

As mobile content usage grows in North America, operators should be thinking about the power of partnership management, real-time rating and online charging. Since the market is beginning to sprout, operators should be thinking about them now.