February 1, 2005

7 Min Read
Oh, What a Tangled Web We Weave

By Tara Seals

Nowadays you can take your phone to pretty much any city and it will work seamlessly, thanks to the beauty of roaming agreements. The term ‘roaming’ describes a mobile customer’s ability to use his or her mobile telephone outside the service area of the operator with which the customer established mobile service, so the user is a guest on a different mobile network. That’s easy enough to handle when all that’s at stake is one kind of voice minute (CDMA, for example). It’s quite another when high-value data and content services are involved, wholesale partnerships have a stake, and cross-technology handsets muck up the reciprocal works.

Typical roaming agreements guarantee that the home operator will pay the guest operator for any charges created by its customer’s use of the network. With data and content, third parties and wholesale partners are involved, creating additional credit risk for the roamed operator. The complexity of managing the financial relationships increases with the number of roaming agreements in place, not to mention the fact that the arrival of multimode phones means users are capable of operating with more than one technology or band. That adds to the number of potential roaming partners.

An example of such cross-pollination can be seen in a recent iPass Inc. and Cibernet Corp. deal, where they have formed a strategic partnership to develop an end-toend solution for Wi-Fi roaming, combining iPass’ transaction clearing system with Cibernet’s financial settlement capabilities, a development with import to carriers, mobile operators and wireless ISPs looking forward to voice-over-Wi-Fi-to-cellular mobile handsets and service, something that touches a data application (WiFi) and voice (cellular).

Complicating mobile matters is the fact that in the mobile broadband world, there can be a vast difference in pricing across services and operators. Paul Hollingsworth, director of Component Management at Convergys Corp., says, “Data bandwidth is charged at a higher rate. So for the user, fifty cents on a home network may be $5 when roaming.”

That means that so-called ‘push services,’ such as stock quote alerts, could give the user an extravagant bill at the end of a vacation, leading to churn and decreased customer satisfaction. “Not to mention credit risk exposure,” says Hollingsworth. “In voice, the risk is not getting paid for bandwidth. In the content world, there’s a bigger exposure because you have to pay the content provider. Users should be given a code to show risk, so the roamed operator can choose whether or not to provide service without real-time authorization.”

Convergys is addressing that issue with pre-authorization of charges for the retail amount with a product called Convergent Prepay, which performs post- and pre-pay functions, so an operator can offer services to customers on both levels.

“With content, overspending can happen very quickly - users rack up the content charges when roaming,” says Hollingsworth. “We can put the same checks and balances into it for postpaid that you have for prepaid, and give them a firm credit line. So they can’t spend more than their credit limit.” This becomes particularly piquant for certain activities that are considered highrisk - m-commerce, adult content, gambling and gaming. “An operator needs to determine whether a user can roam certain services and determine the limits.”

Another issue is a lack of standardization in operator business models. “There arelots of models to provide content, involving the local operator and the content provider - is it a wholesale relationship or is one just providing bandwidth for delivery of the other’s service?” says Hollingsworth. “Different operators have different models - so how do you get them to know how the other is doing it for an accurate settlement? The standards are not in place.”

Intec Telecom Systems plc is addressing the complexity and cost of settling for content and data applications like VoWiFi in a wholesale environment. “As the telecom value chain becomes more complex, the availability of new services is creating a revenue stream of rich potential - not just in terms of retail revenue but also partner revenue - whether it revolves around traditional voice, access or content,” says Ben Samuels, director at Intec Business Solutions Group. “Securing these new revenue streams means developing the capability to recognize, rate and bill partners for a much wider range of services.”

Alongside these changes involving content, operators still have to address the basic business challenges posed in traditional interconnection and settlements, he adds. “Accurate agreement rating and billing, and the management of negotiated agreements, helps an operator to one, control costs by neither undercharging nor overcharging its partners; and two, improve cash flow through quicker settlements, eliminating the cash flow lag caused by settlement disputes.”

To encourage wholesale success given the explosion of new mobile services and content, Intec has launched the latest version of the InterconnecT solution and will formally announce its Content Partner Management (CPM) solution and its accompanying Partner Relationship Module (PRM) later in 2005, designed for partner management, settlement and billing. Samuel says it supports any partner and business agreement type for virtually any service, for faster introduction of settlement agreements for new products and services.

“It … needs to offer a unified solution partner management and settlement for all services including data, voice and content,” says Samuel of the ideal partner settlement solution. “It needs to enable service providers to offer incentives to innovative and successful partners in order to deliver attractive products and services to subscribers. It must enable service providers to manage numerous partners efficiently by allowing configurable levels of partner self-care and partner selfregistration. A high degree of partner self-service, in turn, lowers costs and keeps partners informed and loyal.”

The cost of managing the complexity inherent in today’s mobile landscape is also a challenge that Convergys’ Infinys, a real-time billing and rating engine, is tackling. Infinys uses the same system for settlement as for retail charging, and offers a partner relationship management view to help data roaming and wholesale agreements flow smoothly. “For a telecom partner or broker for content, the margins are very low,” says Hollingsworth. “You’re dealing with microtransactions. If I run the OSS for that on the same level as I do for voice, I’m bankrupt, so we have a model where the cost is shared across hundreds of customers.”

Among all this, operators must focus on keeping customers happy. “In general, the mobile revenue in Western Europe and North America is on the service side,” says Kari Loukola, director of marketing and operations solutions at Nokia. “If you look at the value chain, instead of managing the network on a technical level, they’re running the network like a business machine and focusing on how customers see the network.” That has given rise to new business requirements for operators, including gaining revenue through new feature-rich services while reducing the cost of service creation, opex and capex, and linking network resource knowledge to service knowledge for revenue assurance and SLA management.

“This is a multivendor environment, and a multiaccess environment,” Loukola adds. “International roaming makes a huge difference for operator models. The service side is more straightforward. Customers choose services and that’s it with wireline. On the mobile side, it’s different. You can have a GSM phone that can choose the network when roaming. All of your minutes are very valuable to an operator, and they need to make sure they can keep them.”

Mobility Changes Domain Requirements

Network domain

  • Multivendor platforms

  • Longer delivery chains: more elements and new technologies

Source: Nokia


Cibernet Corp. www.cibernet.com
Convergys Corp. www.convergys.com
Intec Telecom Systems plc www.intec.com
iPass Inc. www.ipass.com
Nokia www.nokia.com

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