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Compensation Analysis of Next Generation Services
28 – 31 March 2006Dagstuhl Seminar Internet Economics
Professor George [email protected]@tno.nl
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Introduction
• University of Groningen (RuG): Mathematics, in particular dynamical systems (quasi-periodicity)
• KPN Research: 1988 – 2002, TNO Information & Communication Technology: 2003 – now, SeniorStrategist (www.tno.nl)
• From 2001, RuG, Professor of Telematics; Faculty of Management & Organization, Research School Business & ICT
• Member Executive Council Global Billing Association (GBA, www.globalbilling.org)
• Research Area: Billing and Customer Care
Billing Knowledge groep at TNO ICT:•Support of end-to-end billingprocesses; •Specification of business, functional and technical requirements; •Design of billingarchitecture and –systems/processes;•Testing, audits;•1st time enigineering in state-of-the-art Billing Lab.
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Overview
• Introduction• Basic Billing Steps
• Billing Developments• Current Operations• Current Research
• Compensation• Compensation Complexities• Basic Compensation Case• Extended Compensation Case• Compensation Agreements
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End-UserServiceProvider
Service
Input• Customer Information• Pricing Information• Accounting Information
Output• Invoices• Notifications
Billing
€
IntroductionBilling Basics
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RatingPricing Information
Mediation
Accounting: Accounting Details
Customer InformationBilling
Bill Presentment
Payments, Collections,Reconciliation
IntroductionBilling Subprocesses
InvoicesNotifications
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Billing Developments
Operations1. Billing of Packagers2. Convergent Billing3. Flexible Pricing Models4. Mobile Content Billing5. CRM & Billing6. Mobile Payments
Research7. Compensation
• Ambient Networks• Sensor Networks
Trends & Developments
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1. Billing of Packagers
Customer
Operators
Packager
Access Networks
Service ApplicationsPlatform
ServiceProviders
Servers
Service
PartnersPartners
BillingBilling
Examples: Fixed Mobile Convergence, Multiple Play, .
Trends & Developments
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1. Billing of Packagers
Customer
Operators
Packager
ServiceProviders
Service
PartnersBillingBilling
Mediation
PRM
•Partner Relationship Mgt (PRM)
Trends & Developments
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1. Billing of Packagers
Trends• Customers choose Brands not providers, operators• Customers want a single point of contact• Billing done by specialized Billing Service Providers
Key Success Factors Operators• Roadmap and Implementation plan for Operators wide Packager architecture• Availability of adequate PRM system
Trends & Developments
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2. Convergent Billing
Partners ControlNetwork Application
Converged Services
Mediations LayerMed-1
Med-2 Med-3
Customers
RetailWholesale
• No stove pipes• Horizontal convergence
•Mediation, •Rating, •Billing
BillingWholesale
Prepaid
Postpaid
Retail
Trends & Developments
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2. Convergent Billing
Trends• IMS Presence & Core• VoIP• Fixed Mobile Convergence (FMC)• Prepaid/postpaid convergence
Key Success Factors Operators• Roadmap and Implementation plan for operator wide mediation,
rating and billing architecture
Trends & Developments
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3. Flexible Pricing Models
Partners
Services
Mediations Layer Customers
Retail
Wholesale
• Pricing models fit customer needs better • Pricing models support new business models and new services
RatingBilling
Trends & Developments
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3. Flexible Pricing Models
Trends• Multi Contract SIM• Energy Bill• Prepaid top-up methods • Customers want more transparency and cost control• More event based pricing, bundles, cross product discounts, bonus
constructions, flat fees, group-based rate plans, home zone constructions, …
Key Success Factors Operators• Flexible and powerful rating engine • Online/Real Time interfaces with Customer and Product Databases
Trends & Developments
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4. Mobile Content Billing
Trends• Content becomes Infotainment• Mobile content is dominated by 3G (Girls, Games and Gambling) in
Video Messaging• Mobile TV
Key Success Factors Operators• Enabling communication of triggers, stimulation (e.g. conversational
content: personal, interactive, self-expression)• Billing/rating of events (triggers) and of VAS:
downloads/streaming/interaction• Implementation of adequate DRM – Billing solution
Trends & Developments
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5. CRM
• Shift from customer acquisition to customer retention• Implies shift from product oriented to customer centric approach
Network
Service
Customer
Billing CRM
Info
Data
Usage Data
Customer data
Trends & Developments
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5. CRM
Trends• Customers want to
• control their costs• be treated as an individual• have end-to-end control over service
• Customer Lifecycle Mgt• Customer Revenue Mgt• Best Plan Advice
Key Success Factors Operators• Offering online secure access to billing and CRM data• Supporting packaged propositions
Trends & Developments
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6. Mobile Payments
Trends• National (bank) solutions, no international solutions (Simpay debacle)• Korea/Japan develop successful m-payment solutions based on NFC• Strong foothold for credit card • M-payments• Micro payments• EBP & payments
Key Success Factors Operators• Supporting Payment Service Providers with introduction of m-payment
solutions• Fixed Mobile convergence
Trends & Developments
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What is beyond 2008?
• Current billing trends will stretch out over the horizon• Increased focus on customer satisfaction and customer care• The move to IP• Prepaid becomes more about financial risk mgt than servicing low-
value customers• Real-time billing infrastructure gives better control over service
usage and accounting• Next-generation mobile content and data services require flexible
OSS and Billing systems (self provisioning and self care)
Trends & Developments
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Compensation
• What is Compensation?• Basic Compensation Scheme
• Compensation Examples• Ambient Networks• Sensor Networks
• Compensation Complexities
• Thanks to Ralph Kuhne (Uni Tubingen/Siemens) for some slides
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What is Compensation?
• Instead of hierarchical billing we consider peer-2-peer billing• Therefore we speak of Compensation• Note that the compensation relationship may vary per service (session)
• With Compensation a compensated party (charging party) and a compensating party (charged party) are involved.
• The compensated party provides some service for which it gets compensated.
• The form/amount of compensation is negotiated • Or already determined in a pre-established agreement or contract
CompensatedParty
CompensatingParty
Service
Compensation
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Basic Compensation Case
Party 1resources
compensation
Interworking Steps
• Advertising (service, network)
• Evaluation of Compensation
Agreement (price, payment method
Record format, split of comp. functions over
two or more parties)
• Interworking
• Ending (also of compensation)
Compensation Functions in CF
(Compensation Functional Entity)
1. Accounting
2. Charging
3. Billing
4. Presentment
5. Payments (Collection)
CF Party 2 C
F
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Compensation Analysis in Ambient Networks
• Ambient Networks is an Integrated Project within the 6FP (IST-2004-2.4.5)
• Aim is to develop a new networking concept beyond today’s fixed and 3G mobile standards• Networks will become more technically heterogeneous,
accommodating old and new access systems as well as applications and services: migration and service roll-out will be not a one-off activity but a constant activity
• Today’s systems will be complemented by a diverse mixture of other networks – personal, vehicular, sensor, hot-spot and more. A network of networks will have to form and re-form dynamically (self-composition and self-management)
• Smooth transition from legacy networks
• Task Leader Task TG3: Compensation (82PM); 2006 -2007• Partners: DoCoMo Labs, Elisa, France Telecom, Siemens,
Telefonica, TNO, VodaFone
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An Ambient Network Scenario
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Front Office
Back Office
Mediation
Front Office
Back Office
Customer Utility Company
Example Compensation in Sensor Networks
Smart Meters (sensors)
Customers may also be Energy Providers and hence are compensated by the Utility Companies
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Compensation Complexities
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Extended Compensation Case: Compensation Service Provider involved• A Compensation Service Provider (CSP) provides some functionality
necessary for compensation to take place, e.g.• it maintains the account of one of the involved parties• it collects information about resource consumption and rates it
(delegation of charging task)• A CSP may buy the claim of the compensated party and sell it to the
compensating party (both interactions may involve negotiations)• More than one CSP might be involved
CompensatedParty
CompensatingParty
CompensationService Provider
Service
Compensation
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Extended Compensation Case
Party 1resources
compensationCF Party 2 C
F
Compensation Service Provider
CF
Compensation Info
•usage records
Compensation Info
•invoice (postpaid),
•decrease of account (prepaid)
Compensation Info
•Prices
• customer details
• accounting
• payments
•Mediation
•Charging
•Presentment
•Management of accounts
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Compensation Complexities (1) Seamless Interoperator Handover
Home-Mobile NO
Visited-MobileNO
Otto
subscription
compensationagreement
Visited-MobileNO
dynamic compensationagreement
access
handover
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Compensation Complexities (2) Otto provides a relaying service
Home- Mobile NO
HotSpot Otto
subscription
compensationagreement
compensating party compensated party„Compensation Service Provider“(provides Otto‘s account)
Theo
compensating party
access
• Otto is compensated by the HotSpot for providing a relaying service• Theo compensates the HotSpot (is not aware of Otto’s extension)
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Compensation Complexities (3) Otto moves to another domain unaware of the underlying network
Service Provider
HotSpot I
Otto
compensationagreement
compensated party
compensating party
• Otto compensates Service Provider• SP compensates HS I• Otto moves to HS II while having seamless handover of service • Hotspot II compensates Hotspot 1 • What if HS1 drops out or HSII raises the price?
HotSpot II
Otto
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Compensation Complexities (4)Independent Compensation of Service and Access
Operator
Service
Provider
CF
CF
€ (compensation for services)
€ (compensation for access)
service
• Example: User makes use of service offered by SP, access is by Operator
• User has business relationships with SP and with Operator
• Therefore user compensates SP as well as Operator
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Operator
Service
Provider
CF
CF
€ (compensation for service + access)
€ (compensation for access)
service
access
• Example: User makes use of service offered by SP, access is by Operator
• User has only business relationship with SP and therefore compensates SP
• SP compensates Operator
Compensation Complexities (4a)Dependent Compensation of Service and Access
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Operator
Service
Provider
CF
CF
€ (compensation for service + access)
€ (compensation for service)
• Example: User makes use of service offered by SP, access is by Operator
• User has only business relationship with Operator and therefore compensates Operator
• Operator compensates SP
Compensation Complexities (4b)Dependent Compensation of Service and Access
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Compensation Complexities (5)
Aggregator Compensation Scheme
Operator
Service
ProviderCF
CF
€ (compensation for aggregated service)
€ (compensation for service)
Service
Aggregator
CF
€ (compensation for access)
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Under construction
• Definition of • Compensation Agreement• Compensation Functional Entity• Transport of Compensation Data between networks over interfaces
• Business Models and Compensation Configurations• Online or offline charging• Dynamic Compensation Agreements (dynamic pricing)• Re-negotiating Compensation Agreements
• Compensation and Security• Input to Standardization Bodies (IETF, 3GPP,..)
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Discussion