Convergent charging
Encyclopedia
Convergent charging and billing (also known as convergent charging, converged charging and convergent billing), is a solution in the telecommunication
s industry that enables common management of all users and all services for operators.
It includes convergence of payment methods like prepaid and postpaid, as well as access methods and services like fixed
telephony, mobile telephony
, broadband
and TV
.
and content, support for bundling of services, and the ability to create a single bill and statement for all communications services including fixed, mobile, broadband and TV.
A converged charging system is described as having the ability to control services and manage balances in real-time. This includes, for example, authenticating the subscriber
and checking the account balance before service delivery to the end user. A converged charging system can also notify users when the account balance threshold set by the operator is reached, or terminate service connectivity when real-time charging indicates that credit has been depleted. This real-time capability can be used to deliver promotions and notifications to service users to stimulate usage.
A number of motivations have been suggested to explain why mobile telecoms providers use convergent charging & billing. One is the ability to offer mobile service packages that include both pre- and post-paid services. Another is a sustained drop in Operating Expenditure thanks to reduced billing system complexity, since operators run a single billing platform rather than multiple ones.
The telecoms and software consulting firm Ovum
has said that convergent charging can greatly reduce revenue leakage. Swedish telecoms supplier Ericsson
has stated that convergent charging & billing can increase marketing flexibility for operators and create revenue growth. Telecommunications software provider Redknee has said that convergent billing allows operators to launch targeted promotions quickly and deliver an improved subscriber experience. Openet
reinforces this by saying "Convergent Charging makes it easier for communication service providers to optimize profitability by providing flexibility to deploy any service to any type of subscriber using any payment method with any set of business rules.". Finnish telecoms supplier Nokia Siemens Networks
is of the belief that the solution also provides the flexibility and cost transparency that prepaid and postpaid subscribers need to take up new services. Convergent charging & billing has been credited with reduction of OPEX
.
has also highlighted potential migration risks, reservations about return on investment
and the need for a business case
for making a change.
Telecommunication
Telecommunication is the transmission of information over significant distances to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded...
s industry that enables common management of all users and all services for operators.
It includes convergence of payment methods like prepaid and postpaid, as well as access methods and services like fixed
Landline
A landline was originally an overland telegraph wire, as opposed to an undersea cable. Currently, landline refers to a telephone line which travels through a solid medium, either metal wire or optical fibre, as distinguished from a mobile cellular line, where transmission is via radio waves...
telephony, mobile telephony
Mobile telephony
Mobile telephony is the provision of telephone services to phones which may move around freely rather than stay fixed in one location. Mobile phones connect to a terrestrial cellular network of base stations , whereas satellite phones connect to orbiting satellites...
, broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
and TV
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
.
Characteristics
Characteristics attributed to a convergent charging & billing system include support for multiple service types such as voice, data, multimediaMultimedia
Multimedia is media and content that uses a combination of different content forms. The term can be used as a noun or as an adjective describing a medium as having multiple content forms. The term is used in contrast to media which use only rudimentary computer display such as text-only, or...
and content, support for bundling of services, and the ability to create a single bill and statement for all communications services including fixed, mobile, broadband and TV.
A converged charging system is described as having the ability to control services and manage balances in real-time. This includes, for example, authenticating the subscriber
Subscription business model
The subscription business model is a business model where a customer must pay a subscription price to have access to the product/service. The model was pioneered by magazines and newspapers, but is now used by many businesses and websites....
and checking the account balance before service delivery to the end user. A converged charging system can also notify users when the account balance threshold set by the operator is reached, or terminate service connectivity when real-time charging indicates that credit has been depleted. This real-time capability can be used to deliver promotions and notifications to service users to stimulate usage.
Rationale
The need for convergent charging & billing has been partly explained by consolidation within the communications industry, the launch of new multimedia services and the increasing emergence of multi-play service offerings on mobile networks.A number of motivations have been suggested to explain why mobile telecoms providers use convergent charging & billing. One is the ability to offer mobile service packages that include both pre- and post-paid services. Another is a sustained drop in Operating Expenditure thanks to reduced billing system complexity, since operators run a single billing platform rather than multiple ones.
The telecoms and software consulting firm Ovum
Ovum Ltd.
Ovum Ltd. is an independent analyst and consultancy firm headquartered in London, specializing in global coverage of IT, and telecommunications industries. It began operations in 1985 and by 2005 claimed to be the largest technology analyst firm that was headquartered outside of the United States...
has said that convergent charging can greatly reduce revenue leakage. Swedish telecoms supplier Ericsson
Ericsson
Ericsson , one of Sweden's largest companies, is a provider of telecommunication and data communication systems, and related services, covering a range of technologies, including especially mobile networks...
has stated that convergent charging & billing can increase marketing flexibility for operators and create revenue growth. Telecommunications software provider Redknee has said that convergent billing allows operators to launch targeted promotions quickly and deliver an improved subscriber experience. Openet
Openet
Openet is a multinational company that provides service optimization software to communication and media service providers worldwide, enabling them to control, monetize and increase visibility into the usage of services and network resources...
reinforces this by saying "Convergent Charging makes it easier for communication service providers to optimize profitability by providing flexibility to deploy any service to any type of subscriber using any payment method with any set of business rules.". Finnish telecoms supplier Nokia Siemens Networks
Nokia Siemens Networks
Nokia Siemens Networks is a global data networking and telecommunications equipment company headquartered in Espoo, Finland. It is a joint venture between Nokia of Finland and Siemens of Germany...
is of the belief that the solution also provides the flexibility and cost transparency that prepaid and postpaid subscribers need to take up new services. Convergent charging & billing has been credited with reduction of OPEX
Operating expense
An operating expense, operating expenditure, operational expense, operational expenditure or OPEX is an ongoing cost for running a product, business, or system . Its counterpart, a capital expenditure , is the cost of developing or providing non-consumable parts for the product or system...
.
Challenges
Challenges to the introduction of convergent charging & billing include migration from existing billing systems for an incumbent telecoms operator. IT research and advisory company GartnerGartner
Gartner, Inc. is an information technology research and advisory firm headquartered in Stamford, Connecticut, United States. It was known as GartnerGroup until 2001....
has also highlighted potential migration risks, reservations about return on investment
Rate of return
In finance, rate of return , also known as return on investment , rate of profit or sometimes just return, is the ratio of money gained or lost on an investment relative to the amount of money invested. The amount of money gained or lost may be referred to as interest, profit/loss, gain/loss, or...
and the need for a business case
Business case
A business case captures the reasoning for initiating a project or task. It is often presented in a well-structured written document, but may also sometimes come in the form of a short verbal argument or presentation. The logic of the business case is that, whenever resources such as money or...
for making a change.
External links
- Converged Charging
- Crestel Convergent Rating & Charging http://www.crestel.in/convergentrating.html
- Aradial Converged Charging Aradial
- Dynasoft's convergent telecoms voice and data billing platform, Dynasoft TeleFactura
- SAP's Convergent Charging Product