Topping the Bill

The advancement of network services being made available by service providers has proven both a blessing and a burden for the service providers, as customers become increasingly discerning. Ronan Shields examines how operators are responding to the changes posed when charging for converged data services.

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By  Ronan Shields Published  May 30, 2007

Market dynamics|~|Thierry_Lafue_EVISTEL.200.jpg|~|Thierry Lafue, head of marketing in the pre-sales department at Evistel, says the company are aiming to target the Middle East market. |~|The advancement of network services being made available by service providers has proven both a blessing and a burden for the service providers, as customers become increasingly discerning. Ronan Shields examines how operators are responding to the changes posed when charging for converged data services. The wave of advanced data applications available to the market poses network operators with a series of challenges, as end-users demand enhanced services and increased value for money. Falling ARPUs in the voice and SMS segments further compounds the financial pressure on network operators to develop innovative services, many of them based on infotainment-type applications. Industry pundits suggest that converged billing solutions are now a necessary tool in the contemporary market as they help decrease churn, attract new customers, and enable operators to offer differentiated services such as per second billing. “Recently the strongest growth in the MEA telecoms markets for converged billing solutions has been driven by the mobile segment,” states Hassan Gasbani, principal, Communications and Technology Practice, Middle East Leadership Team, at Booz Allen Hamilton. “The gap in technology adoption between MEA and European telecoms markets has been shrinking over the past few years. Demand for convergent billing solutions could witness growth, mainly driven by integrated operators in order to differentiate their service offerings and compete against the larger pure players,” Gasbani adds. This trend was recently evidenced by regional operator Wataniya Telecom penning an agreement to deploy HP’s Convergent Charging billing solution in Algeria. The move sees Wataniya’s Nedjma become one of the first mobile operators in the global market to deploy a fully convergent billing solution that manages both voice and data services on prepaid, and postpaid plans. “Wataniya is increasing its competitive advantage through unmatched customer service and seamless billing will play a leading role,” comments Joseph Ged, chief operating officer, Wataniya Telecom Algeria. Commenting on the deal Elisabeth Rainge, programme director, next-generation OSS and billing, IDC, states: “In today’s fast-moving market, mobile operators know they can’t launch data and multimedia services without an advanced billing system that is efficient, and highly adaptable." France-based billing company Evistel plans to leverage its expertise in advanced markets to prove a point of difference in the MEA. Having paired with operators such as Mauritel and Maroc Telecom, Evistel claims that many of the region’s new market entrants are looking to convergent billing solutions to aid their fortunes. “A lot of the latest market entrants in the region are investing in the latest billing solutions as they are eager to prove a point of difference from the market incumbents,” says Thierry Lafue, head of marketing in the pre-sales department at Evistel. “This has led us to have great confidence in the market and has encouraged us to look at expanding our business into the Middle East where we are aiming to team with various local partners,” adds Lafue. Network traffic in the MEA consists mostly of voice and SMS but Evistel suggests that an increasing number of network operators in the region are starting to invest in advanced billing solutions for services such as MMS and IP-sessions. “Market liberalisation in the region has led to an acceleration of service deployments making operators more vulnerable to cost competition. Operators that are not prepared for these changes in the market dynamics risk deploying multiple, service specific, point billing solutions that are integrated at the back end of the network,” says Lafue. ||**|||~|Hassan_Gasbani_BAH.200.jpg|~|Hassan Gasbani, principal, Communications and Technology Practice, Middle East Leadership Team, at Booz Allen Hamilton, has identified the mobile segment as driving demand for converged billing solutions. |~|Billing expert LogicaCMG also believes the regional shift towards market liberalisation has increased demand for converged, advanced billing services. Operational in a variety of MEA markets, LogicaCMG states this trend is set to continue as mobile penetration steadily rises. “The number of mobile connections in the Middle East is growing at 50% on an annual basis with marginally higher growth in the prepaid segment,” says Neil Campbell product manager, convergent solutions, payments business unit, LogicaCMG. “In order to profitably sustain growth, operators will be looking to maximise the value from their existing solutions and we see many ways to extend features of solutions already deployed in region. We also see major opportunities for new adjunct solutions that are able to deliver new capabilities alongside operators existing infrastructure,” he adds. LogicaCMG also claims that convergent solutions will offer operators additional flexibility in pricing their core voice and SMS services – enabling them to introduce more innovative bundles and, flexible tariff plans, and promotional offers – aiding operators to minimise the effect of commoditisation on core services. Increased competition presents operators with a myriad of challenges and given the transitional dynamics of MEA markets, operators would be wise to adopt a tempered approach to this new technological frontier. “The approach to convergence advocated by LogicaCMG is one of evolution,” says Campbell. “Using this approach, the business case for deployment of a convergent billing system is strong even when an operator has a low usage of data services.” He also notes another issue for operators in the region may be that they have invested heavily in data-only payment solutions, and because of low demand they have yet to realise the benefits of this investment. “The solution in this case is to deploy a convergent solution that integrates with existing infrastructure, leveraging existing investment rather than seeking to replace it,” Campbell recommends. Redknee, a billing company that provides MTC Kuwait with a real-time rating solution for SMS, MMS, and data services, also claims that market dynamics are impacting the uptake of advanced billing solutions. “As the MEA market continues to grow and with new licensees introduced, operators will seek to expand and strengthen their portfolio through mergers and acquisitions,” says Vincent Wong, production line managment at Redknee. “As this development occurs, the demand for data services and roaming-service enablers, such as international top-up, will drive demand,” he adds. An integral part of converged billing solutions is IP-mediation, distinguishing between different types of data activity during an IP-session as well as identifying the origin and destination of the traffic. “One of the main challenges faced by service providers offering converged services is distinguishing between different types of activity within an IP session,” says Ben Bannister, product manager of Intec Telecoms Systems. “Wireless operators will have real-time rating, which requires real-time mediation, this is typically used for prepaid services. There is also post-event mediation, typically used for postpaid services,” he explains. Intec claims that given the present market status, service providers face common challenges in deploying network infrastructure in the minimum time and at the lowest cost possible. Bannister suggests that IP-meditation services enable operators to acquire new customers in a cost effective manner and lowers managing operational costs, as it enables operators to cope with significant increases in traffic volumes while maintaining the flexibility to support the rapid launch of new service offerings. “It's not efficient to process postpaid records in real-time otherwise operators have to process information on a near constant basis. Our billing solutions save costs by delaying this activity for off-peak periods,” Bannister explains. Triple play services are proving a challenge in terms of billing needs and converged service providers are finding that adopting certain business models can result in the maintenance of a robust market presence, according to Gasbani. “In the MEA we have seen the launch of a number of 3G networks albeit with low revenues derived from such networks. Many billing systems claim to be easily upgradeable but the solutions of different vendors vary enormously in how efficiently they are able to scale," Gasbani says. However, the complexity of business needs and the ambiguity of business models adopted by operators, means a lot of tailoring is needed. “Operators need to be able to easily scale their billing system to cope with the offer of advanced data services and must be able to do so without significantly disrupting their existing operation,” says Campbell. ||**||

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