Mobile Billing Blows Up

Such challenges are much less pressing in emerging markets, where operators are positioned to make the phone an almost general-purpose charging engine for subscribers.

"There's a dramatic difference between traditional pre- and post-paid markets," said Tony Poulos, head of revenue management work at the TM Forum. "In the post-paid world, subscribers typically have a credit card so they can buy anything they want over-the-top [without involving the operator]. In pre-paid, the only way to pay is through the carrier. That's very powerful."

Sleepy Billing Vendors Turn Downright Predatory
"The biggest issue that operators are having right now is fully understanding that billing systems are really data systems — there's an absolute need in my mind for real-time charging for every customer, even post-paid customers," said the TM Forum's Poulos. "Every customer needs to be managed and able to be charged" whenever they want new services or more capabilities from or access to the network.

That trend — coupled with an influx of more aggressive, young vendors — has turned the billing, charging and rating industry on its head. Known best for dauntingly complex, years-long projects that cost service providers vastly more in consulting and implementations service than to buy the products themselves, billing solution deployments today are a much different breed, driven rapidly into the network by ever-changing groups of vendor partners — including DPI, policy (both rules and enforcement engines) and charging platform providers.

"Operators are really now much more into real-time decision-making at the edge of the network based on subscriber state," said Openet CT Joe Hogan, noting that inputs to those decisions include a subscriber's current pre-paid balance, the bundles they've subscribed to, usage caps or bands they are working under, their spending patterns and a variety of other policies that can be enforced on the fly by agile operators. All of those individual events can add up for some of its operator customers to 2000 to 3000 transactions being managed — per second. "There are just many more events to track and a lot more decisions to be made through a combination of real-time transaction charging and real-time transaction policy systems," Hogan said.

Those events, when coupled with policy enforcement capabilities, make operator networks a managed rather than open pipe. Mobile operator Play in Poland is using a platform from vendor Comverse, for instance, to track subscriber bandwidth usage in real-time. Once a usage threshold is reached, the operator throttles back available bandwidth, particularly at heavy times, or makes real-time offers to the sub for pay-as-you-go additional bandwidth, said Alice Bartram, assistant vice president of marketing for Comverse's billing group. "The rate of change operators face right now is so fast, they have to be much more agile," she said.

Indeed, more than anything, telecom service providers have capabilities — including control of the network, information about subscribers, and the ability to charge for services — that they need to leverage much more aggressively to not only cement their place in the mobile value chain, and, more importantly, get mobile ARPU moving upward again, said Rafi Kretchmer, director of product marketing-revenue management for Amdocs.

Amdocs recently revealed benchmarks for its real-time charging systems running on IBM blade servers, showing that the combination improved real-time event processing in the network by 300% to 400% -- coupled with significant cost savings from cheaper server and storage costs, said John Polly, IBM's vice president, global sales for the telecommunications industry.

Combining software smarts and cheaper yet powerful hardware is the path to building the smarter pipes mobile operators long for — as well as the path away from dead-end flat rate and other unsustainable mobile service models.

"Flat rate pricing models simply aren't sustainable," Amdocs' Kretchmer said. "In order to mitigate that, there's a crucial need for differentiated pricing. Services providers today are in a position to do that — they hold unique network assets.