In recent years, the telecommunications landscape has been reshaped by a number of seismic trends: the rise of mobility, the growing adoption of smartphones and tablets, the persistence of Wi-Fi, and rapid upsweep in data usage on fixed and mobile networks. At the center of this transformative era is the customer. Evolving customer expectations, usage habits, and lifestyles are driving this change and, in doing so, are creating new challenges for service providers in remaining innovative and profitable market leaders.
Today’s emerging customer trends have disrupted the traditional rules of revenue, causing service providers to reevaluate their approach to charging and billing. Service providers are turning to more advanced, convergent charging solutions in order to roll out new, innovative products and services that deliver on these evolving trends and work to drive up revenue.
The following whitepaper explores the current customer trends that are driving innovation in convergent charging, and in turn, how advanced charging solutions can enable service providers to stay ahead of these customer trends to boost revenues and heighten customer loyalty.
As consumers around the world embrace a more connected lifestyle, they increasingly elect to go online or to use mobile apps to make purchases, pay bills, and track account activity. From online banking to e-commerce, consumers have grown accustomed the convenience and immediacy of managing their lives online, independently.
For communications service providers, this is no exception. Customers expect to have real-time account information at their fingertips. That’s why service providers must have intuitive and convenient customer self-management tools such as web-based subscriber portals and mobile apps in their CRM tool kit. With these tools, customers can track real-time usage, browse and purchase new products and services, and pay bills and refill prepaid accounts with real-time credit card processing. More advanced platforms enable customers to set automatic balance alerts via e-mail and SMS, boost their bandwidth speeds temporarily, manage group settings and parental controls, define personal spending limits, update roaming preferences, and more.
Well-designed and built subscriber portals and mobile apps are not inherent of a high-performing convergent charging system, but they must interact seamlessly with it in real time, as well as with other network elements, including policy control (pcrf), subscriber data management, and other back office systems, whether on a pre-integrated platform or in a multi-vendor network environment. Reciprocally, these systems must afford the capacity and flexibility to fully support the functionality of the customer self-management tools.
Subscriber portals and mobile apps also serve as crucial online marketing channels and points of sale for service providers. In this capacity, these tools must work to eliminate any barriers, lag, or frustrations during the browsing and purchase process. They should also enable service providers to readily push new offers and promotions to customers, and tailor those offers according to each customer’s usage patterns and history.
“Service providers who can deliver personalized services stand to make the greatest gains in market share and customer loyalty.”
For customers today, it’s not just a service plan; it’s a reflection of a lifestyle. Service providers who understand this and can deliver personalized services that cater to customers’ wants and usage habits stand to make the greatest gains in market share and customer loyalty.
In order to successfully deliver on the demand for more personalized services, service providers require a convergent charging solution that offers the flexibility to create a rich portfolio of differentiated service offerings. Because different customer segments have different usage habits and needs, the charging solution should enable service providers to tailor service offerings to suit the needs of each target segment. It should also empower customers to customize their service plans and dynamically define settings such as personal spending limits, parental controls, and roaming preferences. And finally, to stay ahead of with customers’ ever-evolving lifestyles, the charging solution must facilitate
a rapid time to market for new, in-demand products and services.
Carrier-grade solutions like Alepo’s Convergent Charging and Billing Platform meet and exceed these criteria, making it possible for service providers to craft truly differentiated and innovative service offerings that drive up revenues and customer loyalty. Examples of such innovative service offerings are discussed below.
The recent rollout of shared data plans by major U.S. carriers gives testament to the demand for lifestyle-based service plans. Shared plans speak to the usage habits and needs of families, small business employees, individuals with multiple devices, couples, and others who use multiple devices yet would benefit from a convergent service plan across all devices. In a shared plan, all group members or devices dip into a single bucket of data (or SMS messages, voice minutes, etc.) for their usage. In the case of a family with data-hungry teenagers and parents who primarily use data for casual e-mail and voice calls, a shared plan can be an optimal way to even out the disparities in usage habits in a cost-effective way. For an individual customer with secondary data-only device such as tablet, a shared plan is a logical way to access data services across all devices while enjoying the ease of managing a single account.
As service providers gravitate away from flat-rate and unlimited plans, service tiers emerge as an attractive option to reach a wide range of customers with differentiated services. Flat-rate pricing only accounts for a single price point along the demand curve, often falling short of satisfying the needs of all customers. In reality, some customers are willing to pay a premium price for premium services, such as large data volume limits and higher bandwidth speeds. For other customers, a basic, budget plan may better suit their needs. With tiered service plans, additional bolt-ons and promotions such as unlimited access to a particular social media website or premium video streaming during off-peak hours can be included to further heighten customer satisfaction and differentiate services.
A recent business model that’s quickly gaining attention, the data pass upends the rigidity of traditional data plans that require long-term commitments and can leave casual users feeling overwhelmed and overcharged for their usage habits. With a data pass, customers are able to purchase one-time allotments of data services at their convenience, whenever and wherever they need it.
As a single, one-time purchase, the data pass is an attractive option for infrequent users, travelers, and for use on secondary mobile devices, such as tablets. It can be used as a convenient option for international roaming services. Service providers can also offer a data pass as a free trial to new customers to introduce them to the service and to create an incentive to become a long-term customer.
Data passes are commonly sold in terms of volume and validity, for example, a 50Mb data pass valid for one week. When the pass’s volume balance is depleted or when the pass expires (whichever occurs first) the user is disconnected or redirected to a captive portal or mobile app to purchase another pass.
Wi-Fi is a persistent and widespread technology, today reaching over 700 million homes, offices, municipalities, and Wi-Fi hotspots worldwide. And, with Wi-Fi-ready mobile devices on the rise, Wi-Fi is predicted to account for nearly half of all IP traffic by 20161. With this in mind, service providers have recently begun to see great potential in leveraging Wi-Fi to create new, heterogeneous network strategies and business models.
The ability to monetize Wi-Fi can constitute a major incentive for service providers to incorporate Wi-Fi services into their service portfolio and to grow their Wi-Fi hotspot footprint. In monetizing Wi-Fi services, both fixed and mobile network service providers can unlock new revenue streams and offset the costs of the Wi-Fi infrastructure. It affords service providers the opportunity to expand their market share, reach to new customer segments, and differentiate their services portfolios.
For service providers, the ability to harness the revenue potential of Wi-Fi has posed a challenge, especially in developed markets where free, public Wi-Fi hotspot networks are the norm. In order to successfully capitalize on Wi-Fi, service providers must be able to add value to the Wi-Fi services that others cannot. For example, service providers can make it possible for their customers to purchase Wi-Fi services alongside their existing service plans, and to automatically select and connect to the service providers’ Wi-Fi networks. Through network convergence, service providers can deliver a convenient and ubiquitous customer experience across multiple networks that other Wi-Fi pure players cannot contend with.
With an advanced convergent charging solution, service providers can explore a multitude of potential Wi-Fi business models and revenue opportunities. For example, fixed service providers can deliver quadruple play services, offering access to their Wi-Fi hotspot network or partner Wi-Fi hotspot network as part of a bundle or monthly add-on package. And for mobile network operators, there are boundless opportunities to cross sell, upsell and bundle Wi-Fi hotspot services alongside mobile data plans, whether flat rate or metered. Service providers can even offer plans that share a prepaid account balance across mobile data and Wi-Fi services.
Overall, the approach to a Wi-Fi business model, the network architecture, and the level of required integration with existing services will reflect the needs of each service provider. That’s why it’s important to partner with a vendor whose field-test experience and expertise in Wi-Fi charging and billing will lend itself to achieving your business goals.
For customers today, real time is the only time. A new service should be available and ready for use upon purchase, an account refill should grant instant access, and balance alerts should hit the inbox the moment the threshold is crossed. Whether postpaid or prepaid, the customer experience must be in real time, from service fulfillment to payment processing to usage tracking, and more.
These expectations don’t toe the line between prepaid and postpaid accounts, they trample all over it. Use cases such as real-time credit control for postpaid customers and hybrid prepaid-postpaid accounts are gaining traction as service providers look for ways to meet customer demand while maintaining zero leakage of revenue. That’s why truly convergent charging systems work to dismantle traditionally siloed prepaid charging and postpaid billing systems, exposing new opportunities to create more versatile and profitable service offerings.
With a convergent solution like Alepo SE Convergent Charging & Billing Platform, service providers can easily transition users between prepaid and postpaid account types, even in the middle of a billing period. For example, a postpaid customer who has reached a postpaid credit limit may have the option prepay for any overage services throughout the remainder of the billing period. This works to reduce fraud, revenue loss and bill shock without barring a customer from consuming additional overage services. Even within a single account type, specific services can cross the line between prepaid and postpaid. For example, a postpaid cable customer may prepay for video on demand services.
“The role of policy continues to grow as service providers look for ways to more closely align revenues with the surging demand for data.”
In recent years, policy control has evolved from a simple gatekeeper to an intelligent and contextual real-time engine. This has empowered service providers to create more granular and efficient network policies, and to deliver a more nuanced Quality of Service (QoS). On this trajectory, the role of policy continues to grow as service providers look for ways to more closely align revenues with the surging demand for data. In order for service providers to fully capture the revenue potential of policy control through policy monetization, they must reevaluate the relationship between policy and charging systems.
Policy monetization calls for a more holistic approach to policy and charging, one that dismantles siloed systems to allow for new, policy-driven business models that shake up stagnate revenues and resonate strongly with customers. A closer interaction between policy, charging, and subscriber repositories gives service providers a broader set of parameters to use in constructing more nuanced policy and charging rules. And, it facilitates greater collaboration between allows network and IT departments to more readily collaborate with their marketing counterparts to develop innovative and differentiated services. A few examples of these can be found below.
There are multiple pathways to achieve policy monetization, and service providers must consider their unique business goals, capabilities of their existing policy and charging systems, as well as the current network topology in order to determine the best approach. A loose association between policy and charging systems can achieve a number of policy-driven business models, while a pre-integrated or tightly coupled solution makes it possible for service providers to base policy rules on real-time account balances, as in the example of smart caps, below. For a deeper discussion on policy and charging integration models, please refer to the Alepo whitepaper, “A Holistic Approach to Policy and Charging.”
Traditionally, usage limits or caps simply cut off overactive users, resulting in missed revenue and churn. With smart caps – enabled by close policy and charging integration – service providers can charge a different rate based on a customer’s real-time account balance or accumulated usage.
For example, once a user reaches his monthly volume quota of 3GB, he receives a reduced bandwidth speed or peak bandwidth limit in lieu of or in addition to overage costs. When polled, customers tend to prefer enhanced smart caps over traditional models.
Bandwidth needs tend to be situational and require dynamic policy control in the hands of subscribers. Bandwidth on demand empowers users to easily and instantly change their bandwidth speed as needed through a subscriber portal or mobile app, boosting it for bandwidth-intensive services like video streaming and online gaming, and lowering it for non-mission-critical services like SMS and email. This feature may be offered as a value-added service, as a built-in feature of a premium plan, or as an as-needed option with an associated per-use fee.
Giving subscribers greater control over their QoS level in real-time amplifies customer transparency and satisfaction. It adds another dimension of granularity to online charging schemes, which had been traditionally limited to time and volume. Associating policy and charging systems makes it possible to monetize dynamic bandwidth speed selection, resulting in greater ARPU, a more personalized customer experience, and better allocation of network resource.
Today, customers’ growing appetite for over-the-top (OTT) services and content delivery weighs heavily on service providers’ data networks and takes a big bite out of traditional voice, video and SMS revenues. Despite this growing demand, the success of OTT services has, for the most part, bypassed service provider revenues. The question remains – how do service providers claim a share of the OTT wealth?
OTT services will become a core component of emerging service plans as service providers evolve their business models to better reflect their customers’ lifestyles and usage habits. For example, tiered service plans that offer a premium video conference service may supersede tiered plans based solely on data volume or bandwidth speed. Already, per-application and per-service charging capabilities are in demand. And, service providers are beginning to develop their own rich communications suites (RCS) in order to seize the OTT opportunity.
Service providers may face an even greater challenge in juggling revenue sharing partnerships with OTT content providers, regulatory compliancy on net neutrality, and customer adoption of new business models. As the access provider and gatekeeper for OTT services, service providers can bring value to the content provider partnership by offering granular policies and QoS for partner content and services. The wireless industry has also tossed around ideas of “toll-free” like data models in which customers would be able to access certain content and apps without it counting against their monthly data allotment. In exchange for the incentivized “free” use of their services, content providers would pay the service provider for the customers’ usage.
While the possibilities for partnership and new OTT-driven business models are still being explored by the industry, one thing is certain. Service providers cannot afford to become just a “dumb pipe” for the delivery of OTT services. Proactive service providers must have in place a capable and future-ready policy and charging control core infrastructure that enables them to leverage a rich communications suite, to deliver an accurate Quality of Experience (QoE) to customers, and to foster successful OTT partnerships as they evolve.
Across the board in customer trends, all signs point to “up.” Around the world, more and more customers are embracing an “always connected” lifestyle. Smartphone adoption is on the rise, as is the number of customers who own more than one data-consuming device. From home to the office and everywhere in between, customers will continue to escalate their data usage. By 2016, annual global IP traffic is forecasted to reach 1.3 zettabytes.1
As the demand for data connectivity grows, so do the demands placed on the network. Service providers must be assured of a high-performing convergent charging solution if they are to ensure a continual, consistent customer experience, even as the network grows and evolves. It’s no surprise that when selecting convergent charging solutions, service providers reportedly prioritize reliability and scalability over price.2 When evaluating such solutions, service providers should consider the following critical features and functions that not only realize high reliability and scalability, but also work to reduce OPEX and total cost of ownership (TCO).
Not all convergent charging systems are created equal. To learn more about how Alepo can provide a solution that stands up to these performance and scalability requirements as well as the emerging customer trends discussed above, explore www.alepo.com or contact Alepo directly at email@example.com
1 “Cisco VNI: Forecast and Methodology, 2011 – 2016.” Cisco, May 2012.
2 “Convergent Charging Deployment Strategies and Vendor Leadership: Global Service Provider Survey.” Shira Levine, Infonetics Research, July 2012.