John Aalbers, next generation services director at Intec Telecom Systems, looks at the mechanics of content-based services and the methods operators can employ in generating revenues from its development
According to US based analyst Juniper, content based service such as MMS, VoIP and Video On Demand (VoD), could be worth in excess of $60 billion dollars by 2007, making next generation technologies (3G) the most lucrative business initiative in telecoms history. In order to achieve this level of financial returns, however, most of the world’s mobile operators have to be equipped with the right OSS solutions for their systems. Essentially, the challenges for the industry include billing for content-based next generation services and how operators can use applications such as interconnect, mediation and real-time charging platforms to unlock their revenue potential and lower the cost of delivering services.
Content-based services have created a significant shift in the role of the operator. No longer is the expertise and knowledge of the product or service in-house. These products and services are best provided by content partners whose core business is built around creating and managing such content. As a result, true profitability has to come from providing the network as a delivery channel for a large number of content partners who have expertise in their area of specialisation — whether it is video, music, gaming or television. Not only will revenue flow from the basic network access you sell, but from the value added services operators provide on behalf of their content partner — offerings such as authentication services, charging and billing services, and access to customer base, to name just a few. These value added services provide compelling reasons for revenue sharing with the content partner.
In order to maximise this revenue generating opportunity, therefore, operators need infrastructure that has been designed with the new role of the operator in mind. Network applications that effectively build on rather than replace the significant investments companies have already made to support voice and other traditional services.
To support healthy revenue streams, what is required in the world of content services are network solution that manage the following key business functions:
* Partner Relationship Management
* Real Time Content Charging
* Content Revenue Sharing (Settlements)
Partner relationship management
In their quest to make the best, most comprehensive set of content available to customers, operators are building relationships with hundreds and even thousands of content partners. Success therefore depends on having the right content at the right time — this means having the right partners.
Given the large number of content partners and the dynamic nature of these partnerships and the products and services they offer, it is crucial that these relationships are managed in a cost-effective and efficient way. As such, a tool is needed to support a number of essential functionality, including:
* Content Partner Registration
* Defining and maintaining revenue share agreements
* Defining and maintaining content-based products and services
* Defining and maintaining pricing structures
* Launching and decommissioning content-based products and services
* Real-time access to outstanding receivables for each defined product
* Supporting full web-based self-care for content partners
Real time content charging
Once content-based products and services are defined and launched, real-time content charging capabilities are also required to enable network operators to sell content to customers and charge them accordingly in real time. Once achieved, real-time charging can provide operators with many essential, instantaneous transaction options such as:
* Intercepting user requests for chargeable content
* Establishing prices for the content
* Providing user a choice of payment option (Pre-paid, Post-paid, Credit/Debit card, M-wallet etc.)
* Performing check balances and reserving appropriate amount
* Confirming purchases with users
* Permitting purchases to proceed
* Applying further credit reservations as needed
* Confirming balance debit upon successful delivery
* Creating a pre-rated usage record for revenue sharing and use by other business support systems
Content revenue sharing (settlements)
Finally, after a content transaction has been completed, a pre-rated record representing the nature and value of the content transaction needs to be created. This record forms the basis of revenue sharing between the operator, the content provider, and other partners involved in the transaction such as sponsors or advertisers.
Content value records should be correlated with corresponding network usage information, an essential process when the billing model involves a combination of content value and network usage components. Among the crucial content revenue sharing capabilities that must be supported by the OSS infrastructure include:
* Multiple revenue sharing rules to each event, managing business models from simple, two-party, to complex, multi-party settlements
* Flexible support for unlimited number of products, since next generation content could have any number of pricing rules and revenue shares. Pricing rules may be pre-rated, rated on a flat, per-event basis, or proportionately rated according to data volume, duration, or arbitrary units. Operators must respond to these differences. Time-of-day and special day pricing should also be supported for content. Events may combine multiple charges, such as flat fees per event, plus volume-based charges, for example.
* Flexible discounting facility: discounts may be triggered by traffic or revenue metrics, and may be stepped or tiered
* Reconciliation functions, including on-screen reports
* Integration with existing financial systems, using automated posting of summarised data
* Facilities for detecting, categorising, editing and re-processing error records
Achieving content billing requirements
Indeed, these combined new challenges highlight the growing role that billing plays for operators making the move towards a rich content based environment. Billing is no longer a neglected back-office application but a vital solution for managing and deploying services to customers more effectively and more profitably. Operators are already looking for the obvious OSS packages to support their new billing challenges — notably scalable retail and wholesale systems and real-time convergent mediation solutions. Interconnect billing software can take care of content revenue sharing issues, supporting the terms of the revenue sharing agreements between the operator, the content provider and other partners. Existing Interconnect software already enables companies to charge other operators for using their network and facilities, whether it is for voice, data or content services.
Mediation and real-time charging platforms
Interconnect, however, is only one of three key components to content billing. The other two are mediation and charging platforms — technologies that many OSS vendors conveniently label as end-to-end ‘Content Billing Solutions.’ These two applications work together to enable operators to deploy channel and device independent services, thereby streamlining overhead, optimizing operational efficiency, and maximizing the potential market of any given content offering. In other words, they help support the crucial functions of partner relations and pre-paid, post-paid and now-paid charging.
Convergent mediation applications have been around much longer than charging platforms and understanding the functions each technology performs for the network is important. Real-time charging platforms make sure that content services can be set up between partners, brought into service, recognised on the network, and accurately and securely billed. The solution can also accurately authenticate consumer details in real-time for payment, and how content or transaction can be priced, delivered and charged using different business models, with each partner receiving the correct revenue share.
Charging platforms are used to either enable or disable access to data services, premium content and commerce transactions depending on whether a customer has sufficient balance (pre-paid) or sufficient credit (post-paid). Because charging platforms operate in real time, they can support all customer types.
In contrast, convergent mediation is the solution that gathers information about a customer event after the service has been delivered to the customer. This is the information that operators need for their network operations, network planning, fraud detection, marketing statistics and of course for billing post-paid customers. In the content billing paradigm, however, it must operate along side a real-time charging application for operators to unlock their revenue potential and guarantee customer satisfaction.
To illustrate the importance of real-time platforms and how they work with mediation and interconnect systems, we can begin by looking at the service package currently offered by Europe’s first 3G vendor, Hutchison Whampoa’s mobile group Three. The company currently offers post-paid customers a wide range of next generation services. Additionally, the company is gaining more customers by offering these same services to pre-paid customers using competitive pre-paid price plans for these new services. For instance, UK users can now sign up for 100 minutes of Video Talk, which includes free content-such as video downloads- for a month, in addition to 100 minutes of voice calls for a set rate of Â£15 pounds a month.
For Three to make this service work — as well as profit from it — the company has a number of factors to consider. Firstly, it has to establish partner agreements for multi-media content and m-commerce services as well as allow consumer access to networks such as the Internet and Corporate LANs. Once these services are in place and being delivered, there is a need to measure a customers usage in real time to ensure they have not exceeded their usage limits — and if they have, to change their charging paradigm for the next part of the transaction.
In respect to charging for advanced services, especially in this pre-paid environment, Three’s customers expect to be instantly and securely authenticated to receive, or be barred from, high-value services (if they don’t have credit to buy services) so the company needs to assure accurate payment of all events. Real-time charging platforms provide instant, two-way communication between network elements, pricing engines and customer balance management systems, together with reliable post-event processing, to ensure payment and service quality. Convergent mediation gathers the information after the transaction event occurs and feeds it into the interconnect or retail billing system to produce an accurate invoice.
Future of content billing
Content based services have the potential to produce unprecedented revenue growth, even in a relatively stagnant or saturated market. To capture unlimited profits, however, providers of value-added content must have the ability to develop brand value and to receive appropriate compensation for the value their content brings to operators. The good news is that most operators already have the necessary interconnect and mediation applications on their networks to support the numerous challenges that content brings to the transaction process. What most operators fail to realise, however, is that their intercarrier and mediation applications require further hardware support to achieve the necessary levels of billing flexibility, data quality and rapid service deployment to make content services truly profitable.
Adding real-time charging platforms to the transaction flow can make this possible. Although a relatively new concept within the OSS space, this technology has become a vital tool for any operator plannning to maximise revenues by offering their content-based services to the masses. And any OSS vendor that has the resources to spend on new software should be developing products to satisfy this demand.