April 15, 2014

10 Elements of Real-Time Convergent Charging Evolution (Part 1)

Here are the first five of 10 core real-time convergent charging capabilities that may be key components of any go-forward revenue management plan.

Real-time Convergent Charging (RTCC) is becoming more prevalent in CSPs’ billing roadmaps and may represent the future for converged billing. After years of gradual convergence between what traditionally have been separate post-paid and pre-paid domains, the argument that says “real time can bill for any model” is gaining ground. It’s not possible or sensible to rip and replace existing infrastructure that shepherds trillions in revenue, but RTCC is enabling innovative product and pricing models.

Within this domain, it’s important to consider how best to evolve a CSP’s revenue management environment to a future state where may RTCC may become the primary architectural element rather than a forward-looking addition to core, offline BSS that continues to shepherd the bulk of CSPs’ revenue today. With that evolution in mind, here are the first five of 10 core RTCC capabilities (the other five coming soon…) that may be key components of any go-forward revenue management plan. How a CSP chooses to sequence these capabilities will depend on its current capabilities; its long-term strategic business goals; and its near term, market-driven priorities.

1. Data Sponsorship 
Data sponsorship has been a hot topic in recent months. The idea here is the ability to roll out services where either the data usage is paid for as part of the service fee and not counted against a customers’ data plan, or a 3rd party would sponsor (i.e. pay for) the data usage, likely on a wholesale basis. A simple example of this would be a customer buying ad-free music streaming for the next 12 hours for $2.99 without that music stream counting against their monthly 4G data allotment. A more complex example is where a cable operator works with a mobile provider on a wholesale basis in order to provide its pay TV customers with 4G access to cloud-based DVR content. The end customer would not pay for additional data (perhaps up to a certain limit), but might pay the cable operator specifically for the mobile cloud-DVR service with the cable operator then buying a large bucket of mobile data in the same way an MVNO might.

2. Flexible Financials and Revenue Reporting
Though flexible financial and revenue reporting are less critical to the customer experience, they are very useful to the CSP. These capabilities should be highly configurable and able to address complex revenue and financial reporting rules relating to accounts receivable, the general ledger, and for any sort of business intelligence reporting purposes. The more that third-party services and various partner and wholesale models become standard practice for service providers, the more these kinds of flexible financial reporting capabilities will become necessary in near real-time rather than pure offline modes.

3. Periodic and Product Charging
This capability is sometimes referred to as “support for customers who do not receive a bill.” We’re not talking about billing people who aren’t customers. Rather, this refers to the ability to offer pre-paid-like services for certain post-paid customers. For example, picture a customer who subscribes to a mobile hotspot that is direct debited against his bank account every month. This is a flat monthly recurring charge for a specific service. It’s not debited and topped up in the some mode as pre-paid service, but it is billed up front each month for the month’s usage. Now, project this capability forward to an OTT partnership model. Rather than floating post-paid charges for the OTT partner, a CSP can charge for the OTT service up front, deliver what the customer wants, and yet offset the risk of owing wholesale payments to the OTT provider without having collected payment from the end customer.

4. Customer-centric Policy Management
Customer-centric Policy Management, most simply, puts usage controls in customers’ hands and gives them a greater sense of control over what they pay for and how they consume it. More practically, it’s what enables time of day controls, usage limits and threshold settings that can result in hard-stops or proactive notifications. In the consumer world, parental controls provide a good example of customer-centric policy management. Parents can control and track when and how their children are using devices, enforcing rules that prevent data usage during school hours and provide them with alerts when their kids consume too much data in a given day or week. On the business side, these controls can limit access to corporate data buckets on weekends or during off-hours to help enforce BYOD policies, especially helpful if an operator wants to introduce hybrid business-personal BYOD plans.

5. Pre-paid/Post-paid Convergence
Pre-paid/post-paid Convergence enables these distinct billing models to co-exist at the service level. An emerging example for this capability is a post-paid wireless subscriber who also has a pre-paid debit account against which she can charge purchases for mobile video rentals. A more typical example is the ability for the parents on a family plan to create pre-paid allowances for their children’s usage which can be refilled via direct-to-bill charge. As more group plans enter the market where non-family members can create share groups with anyone, this capability could allow the primary account holder to add members on a pre-paid basis and enforce usage limits to prevent other members from abusing the shared services. It is likely that eCommerce tie-ins to these services will soon emerge – i.e. the ability to gift funds or services into a friend or relative’s debit account by making a purchase through a major online retailer.

Part 2 of this article can now be found here.

Photo by Arvind Grover with Creative Commons license


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