the future of data rating and charging redknee position paper

REDKNEE THE FUTURE OF DATA RATING, CHARGING AND POLICY

Redknee ’The Future of Data Rating and Charging’ © 2010 All Rights Reserved

The Future of Data Rating,

Charging and Policy

The wireless industry is in the midst of a

transformative phase. While it is true that

it has always been in a state of constant

growth, the progress we are seeing today is

more disruptive than anything seen since

the introduction of the first handheld

wireless handset in 1973.

As with any industry transformation, there

will be companies who plan for change, and

those who resist. New technologies and

new business models will need to be

embraced. This paper is about how service

providers can best prepare to ensure they

have the systems in place to fully leverage

the benefits of new 3G and 4G networks.

Real-time rating, charging and policy play an

important role in the new ecosystem,

helping to protect your network and enable

new charging models, better quality of

service, and greater customer loyalty.

A Change in Mindset

With the introduction of 4G services and

LTE networks, the wireless business model

is rapidly changing. Flat rate data plans are

being replaced by a multitude of new tiered

pricing models that will end up being

beneficial, and in many ways more cost

effective, for most subscribers. Under flat

rate plans, the majority of subscribers have

been subsidizing the heavy data use of a

few; paying high fees for a data plan they

may actually use very little of. Today’s

problem is that many of the low volume

users are now becoming heavy users

themselves, so this model is no longer

efficient. New data-intensive devices such

as smartphones, Apple’s iPhone and iPad,

along with services such as mobile

broadband and YouTube have made almost

all subscribers ‘data-hogs’.

Watching an hour of YouTube clips is the

equivalent in terms of data usage to

sending a million text messages.

Downloading a movie over a mobile device

equals almost 400,000 emails. And laptops

that surf the Internet over a mobile

network are further taxing network

capacity. With the growing field of machine

to machine (M2M) communication around

the corner, soon practically every device-

from the vehicle you drive, the gas meter

outside your home, and even your

refrigerator - will be tapping into data

networks. This sudden uptake in data

demand has left operators scrambling to

increase capacity, dumping millions of

dollars into building out their networks in

hopes of keeping up with today’s

unquenchable demand for data.

In order to combat this problem, many of

today’s operators have been using methods

to target their heaviest users; purposely

slowing their network speeds and reducing


the quality of service for the heaviest users.

Redknee believes this is the wrong

mindset. Service providers should be in the

business of providing service- not limiting it.

Our data rating, charging and policy

management solution enables operators to

support new pricing models that encourage

increased usage and better quality of

service – while boosting average revenue

per user (ARPU) and protecting the network

from capacity strains.

Changing Business Models

Unwired Insight reports that mobile Web

traffic will increase more than 20 times over

the next four years. To prepare for this,

many of the world’s leading operators are

upgrading their network architecture to

Long Term Evolution (LTE). This provides

the much needed increased capacity and

speeds to help accommodate today’s new

devices, and will change some long standing

business models.

One of the most significant changes will be

the increase in third party partnerships

between operators and content providers,

including mobile advertising. In the past,

mobile content was limited to ringtones

and photo sharing. Since the introduction

of the iPhone and other smartphone

devices, a new world of content including

movies, mobile ‘apps’ and access to

Facebook and Twitter have changed the

game plan. Because this new content

comes from new partnerships and requires

quick on-boarding to an operator’s

network, it is imperative that service

providers establish back-office support

systems (OSS/BSS) that can adapt to this

environment. The importance of an open

architecture and APIs cannot be overstated.

Furthermore, the ability to support service

level agreements (SLAs) and QoS standards

puts added responsibility on the service

provider. At Redknee, all of our solutions

have been built on these standards, and will

aid in supporting the growing list of SLAs

resulting from new partnerships.

Redknee’s Three Pillars of Success

1. Rating and Charging Flexibility

With today’s ever-increasing demand for

data, traditional all-you-can-eat payment

plans are no longer practical from the

service provider’s perspective, and it is clear

that operators are moving towards tiered

pricing for data services. Tiered pricing

plans are actually more beneficial to all

subscribers. Low volume users no longer

will be subsidizing the use of heavy users,

and new ‘bundles’ will be introduced that

will give subscribers the types of services

they are most interested in- and willing to

pay for.

Although paying for what you use is

certainly a concept most subscribers can

understand, tiered pricing puts new

demands on an operator’s rating and

charging solution. Instead of a simple flat

rate, now various packages and tiers of

service need to be individually rated,


charged and enforced. Redknee’s Next

Generation Rating and Charging (NGRC)

enables operators to track, rate and charge

for data usage in real-time. It enforces

tiered pricing levels and supports single use,

or ‘bolt-on,’ services.

Redknee’s NGRC provides the flexibility

required to support almost any type of

bundled offering. Service providers can

help build customer loyalty by offering

more personalized packages. For instance,

a Facebook bundle that supports enhanced

social networking apps and services aimed

at high school and college aged subscribers;

or for the business user, an instant

messaging/email bundle. For long road

trips, parents can opt for a ‘bolt-on’

package that allows for unlimited movie

downloads so their kids can be entertained

on the long car ride.

The same type of pay-for-what-you-use

concept has been fairly standard in the

prepaid market, which has seen an upsurge

as the quality of prepaid handsets has made

this type of service more appealing.

Prepaid Blackberry’s and 3G Smartphones

now provide the types of services and

content to a prepaid market that only

postpaid subscribers used to enjoy.

Redknee believes that payment type

shouldn’t dictate service availability.

Subscribers should be able to get whatever

type of service they want, and pay for it

whichever way works best for them. To do

this, service providers need a rating and

charging system with the flexibility to

dynamically track quotas, usage, rates, and

individual profiles - all in real-time.

2. Integrated Policy Control

With flat-rate pricing, there is no incentive

to promote heavier usage of data. Instead,

service providers have been using policy

management to police their networks and

dissuade the heaviest users – even going to

the lengths of degrading service and

sending out warning notices. With tiered

pricing and prepaid plans growing in

popularity, Policy Control, or PCRF, shifts

from controlling costs and degrading

service, to generating revenue and ensuring

quality of service.

Redknee considers this the second pillar of

success. Policy Control, especially when

integrated to the charging layer, helps to

enhance the user experience. It can track

when subscriber’s data use goes beyond a

certain threshold so the operator can send

balance notification alerts – and help avoid

the dreaded ‘bill shock’. User profiles and

preferences can be supported, creating a

more personalized user experience and

helping to engage and empower the

subscriber. In a recent survey, Light

Reading predicts service providers will add a

new ‘policy’ every six to eight weeks.

Polices set around service delivery will

impact various triggers, including location,

network type, device, the subscriber’s tier,

URL, type of application, time of day,

subscriber preferences, etc. The list is

practically endless, bringing a new level of

personalization and quality to the mobile


subscriber, greater customer loyalty, and

more revenue to the service provider.

Yet in order to gain these benefits, back

office systems must be closely aligned. In

fact, Light Reading also states that,

“…service providers need to use policy in a

new way and work to integrate it with back-

office operations and support systems and

with other functions such as charging.”

Redknee’s NGRC is a fully integrated rating,

charging and policy solution that is in

production at some of the world’s largest

mobile networks.

3. Personalization

The third and final pillar of success is about

subscriber personalization. Today’s

subscribers have more control over their

entire mobile experience. Service providers

can better segment their market and deliver

highly targeted promotions, including 3rd

party advertisements and incentives based

on all types of criteria- from the type of

handsets subscribers have, to their current

location and demographic data, along with

historical usage patterns.

For instance, if ‘Joe’ regularly uses the GPS

function on his handset, the operator will

want to notify him when a new GIS app

comes out, or send promos for the latest

GPS enabled handset if his two year

contract is about to expire. And perhaps

Joe would like to opt in to receive SMS

coupons for his favorite coffee shop when

he’s in the vicinity. Family plans also benefit

from personalization options. Parents can

assign bandwidth policies to their individual

family members, ensuring that 13 year old

Sarah can’t access Facebook during school

hours, but still provides her with access to

her school’s online homework portal.

Why Redknee

Today’s new services and technologies

require a flexible rating and charging engine

that is pre-integrated with an industry

compliant Policy Management solution, or

PCRF. This powerful trio helps to ensure

service providers can remain competitive in

a world where the old rules no longer apply.

Redknee’s focus on innovation and

technology leadership has led to more than

50 issued patents or patent-pending

applications, many in the area of real-time

transaction management.

The fact is, data has changed everything –

and Redknee’s NGRC is the fully compliant,

flexible, real-time solution that will help you

not only survive, but prosper, in today’s

new data-centric environment.

Below are just a few recent examples of

how some of our customers have benefited

from Redknee’s award winning NGRC

solution.

Zain Kuwait

CEO Khalid Al Omar commented, “Since the

launch of our first 3G connectivity cards in

2006, our data services have gained in

popularity with our youth, Arab expatriate


and inbound roaming market segments. By

launching new flexible, tiered pricing plans,

we are able to bring the benefits of mobile

broadband in a manner that is attractive to

new markets segments, such as the cost-

conscious and light-usage customers, as we

continue to concentrate on driving data

revenue.”

Telefonica O2

Chief Technology Officer, Pat Moynihan of

O2 Ireland, commented about their prepaid

mobile broadband offering, and how

Redknee’s NGRC played a key role.

“It was a priority for O2 to deliver a prepaid

mobile broadband offering to our customers

in 2009. Redknee was selected to deliver the

project based on their technical NGRC

solution that enables our customers to have

real time and flexible charging capabilities.

There was a very strong commitment

throughout the project to deliver on our

customers’ expectations and the feedback

from our customers since launch has been

very positive”.

Bakrie Telecom

At Bakrie Telecom, where the operator is

launching mobile broadband, NGRC is the

solution of choice. “The competitive

landscape that we operate in means that

we are continuously looking to our partners

to provide us with the tools to maximize our

competitive advantage. Our further

investment in Redknee will enable us to

enhance the customer experience, deliver

fresh and innovative services and capture

market share,” stated Muhammad

Buldansyah, Bakrie Telecom’s Deputy

President Director.

VivaCell-MTS

VivaCell-MTS in Armenia also recently

launched a mobile broadband service,

becoming the first internet connection to

many of the regions underserved. Ralph

Yirikian, VivaCell-MTS General Manager,

stated, “The number of VivaCell-MTS’

wireless broadband subscribers has grown

tremendously since the Company launched

its HSPA/UMTS-based 3.5G network,

reflecting the intensifying demand for

wireless broadband access in Armenia.

Therefore, the priority for VivaCell-MTS now

is to be able to support future data traffic

growth. Due to our extremely competitive

market, we are focused on always

outstripping our competitors by providing

differentiated products that appeal to our

customers. Redknee’s support has been

instrumental to our successful launch of the

most innovative mobile broadband services

to the people of Armenia.”


About NGRC

NGRC is a real-time rating, charging, and

policy management solution for mobile

data services. Recognized in 2010 by Billing

and OSS World as the ‘Best Service

Enablement Tool’, NGRC is based on

patented technology and offers

communications service providers the

flexibility and scalability to launch new

services, while creating new revenue

streams based on diverse pricing options

for both prepaid and postpaid subscribers.

NGRC enables operators to rate and charge

for all their data services, including in-

demand offerings such as mobile

broadband and mobile TV, helping them to

monetize these new services and drive

ARPU growth. It gives service providers the

flexibility to charge for these services in

ways that work best for their subscribers,

whether prepaid, postpaid, or a hybrid of

both – and based on time or bandwidth

consumed.

Redknee’s NGRC offers service providers a

flexible and scalable solution that

seamlessly integrates into existing systems,

maximizing the current network

infrastructure and differentiating its

services from the competition. For more

information, please visit www.redknee.com

For more information on Redknee’s rating and charging solutions, visit: www.redknee.com/products

Or email us at:

[email protected]

http://www.redknee.com/products

the future of data rating and charging redknee position paper

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