A 3G billing maze - Industry Trend or Event

Telecommunications, March, 2001 by Sanjima DeZoysa

Operators are entering a 3G billing maze but with obstacles and barriers at every turn, how will they find the right way out?

To say that billing for 3G services is complicated is an understatement. Operators face numerous hurdles in their development of billing systems, and at the moment flexibility is fundamental. According to Geoff Butcher, chief executive officer, Protek, which develops integrated software solutions and services for next generation communication networks, "The main problem is that most operators don't know what services are going to work on 3G, and therefore it's hard to implement an effective billing system."

He continues: "Only a small percentage of the population, 2.5 per cent, is interested in new technology and advanced services for the sake of being 'new'". To break into the mainstream market, services must be useful to customers and their lifestyle. It is therefore vital that billing systems are flexible enough to support the 3G services that will gradually evolve over time.

3G impact

The structure of 3G networks will be fundamentally different from existing architecture. According to Cerillion Technologies, which provides customer care and billing solutions to fixed, mobile, IP and convergent operators -- in addition to expanding services -- there are four new areas operators must tackle:

* always on -- 3G uses packet-switched networks which means users will be 'always on'. New forms of advertising and sponsored services become possible and third parties may be prepared to pay operators for access to their subscribers;

* range of interfaces -- users will be able to use different types of interfaces, and operators must consider this in order to effectively develop services;

* new partners -- with the expansion of service possibilities it will be impossible for operators to produce every element of content in-house. Therefore operators will have a wider range of partners; and

* new network elements -- these will generate different forms of data from different network points. Billing systems must also be able to rate and analyse this data in real-time. For example, for mobile transactions it will be vital to be able to check credit card limits instantly.

To create efficient 3G billing systems, operators must take all these factors into account -- and this will not be an overnight 'quick-fix'.

3G infrastructure

"With customer bases of around two million, operators are not going to throw out complete 2G systems overnight -- that would be reckless. Therefore many are taking a slow migration path, which is very prudent," says Chris Merrick, marketing and strategy manager (mobile and wireless), Geneva Technology, which provides convergent billing software. Alex Leslie, executive director, Global Billing Association (GBA), an independent forum for billing professionals and the billing industry, agrees claiming that regarding implementation and development of 3G billing systems "most operators are at the 'thinking' stage".

As detailed above, a major issue for operators to address is the fact that their billing software has to be able to recover information from lots of devices it currently doesn't communicate with. To accommodate this increase in data sources, companies such as Narus and Xacct have developed platforms that aggregate data, from different points within the network, into data records -- information such as service/application details, time of use, content and amount of data.

Sue Forbes, VP solutions marketing and business development, Narus, which provides internet infrastructure systems and applications, claims, "It is important to be able to record all activity within the network, and distinguish between different types of transactions, and then bill accordingly. Detailed analysis of the customer base also provides operators with an important insight into consumer needs."

It is clear that the new era of 3G billing requires a wider range and depth of technology and software. In fact, to remain competitive many companies are joining forces, and combining their strengths, to offer operators with advanced billing solutions (Table 1).

Billing strategy

With the development of new services and the introduction of more complex data, the next hurdle for operators is how to bill these services. New parameters include: number of packets, data up or downloaded, quality of service, location and content. It is not clear which will be most practical, and most likely operators will have to use a combination of all these parameters.

On a customer level, the billing system has to be easy to use. As Robin Burton, marketing manager, Cerillion, points out: "The average consumer won't understand packet-switched networks or the value of 1Mb and therefore operators must relate bills and service in a manner that they can understand."

GBA's Leslie agrees: "The trick for operators is to understand that customers want simplicity and balance that against the actual complexity of the billing system." Operators have to invest in customer relationship management systems in order to understand their customers needs better.