| BI 4D: Where the Future is Not the Sum of its Pasts  By Dr. Lorien Pratt, Co-Founder, Quantellia
Fed by operational and analytic data stores, telecom dashboards are moving into a new phase where they provide greater competitive differentiation to service providers as telcos seek to navigate more effectively through complexity. Service providers are challenged by deep supply chains, global competition, technology changes, increasingly demanding customers and a content explosion. They must make smart investments in the right products, at the right price, in the right bundle, launched to the right market, with the right customer touchpoints and with an optimized, leak-free workflow. This complexity can be overwhelming, as it involves a carefully choreographed set of decisions from the tactical through to the strategic. Fortunately, improved migration, revenue assurance and data integrity practices are providing an increasingly reliable data source to guide these choices, and more agile fulfillment stacks allow decisions to be implemented rapidly. According to Toni Graham, program manager for TM Forum’s business benchmarking program, "Revenue assurance is now an established part of almost every service provider's business. Data analysis practices are maturing, and as they do so, what was once only revenue assurance is broadening in scope to a holistic risk and margin management practice with increasing strategic importance." Business intelligence dashboards for margin management, including flows of CDRs and product orders, are an important tool for controlling this complexity. Yet there is an important change taking place. BI dashboards have traditionally been used for monitoring the present: a collection of visual indicators showing the health of a service provider’s “engine”. Like a mechanic reading a car’s computer, using this information to ensure that the vehicle runs at top performance, BI dashboards improve telco operational performance along many metrics. Increasingly, however, service providers want to use this same data to understand the future. For example, says Subex chief architect Ian Emsley, “We see service providers moving from a classic settlement analysis world to one in which they wish to use the same data to make decisions about pricing, packages and promotions in such a way that they maximize margins in the future.” The traditional answer to “future casting” has been to look to predictive analytics to perform sophisticated trending, with the idea that these automated approaches will provide valuable leading indicators of problems or opportunities. However, predictive analytics adoption has been slow and limited to well-understood and carefully circumscribed arenas like churn prediction. The reason: when predicting the future, human judgment and strategic thinking are critical components, and they are left out of a purely automated approach. Even more importantly, as Nassim Nicholas Taleb discusses in his best-selling book, The Black Swan (Random House, 2007), for many important situations— especially in an increasingly complex world—the future is not at all like the past, and so techniques that rely on past data alone can, in many cases, be deeply misleading. Fortunately, there is an answer. An automobile design team building tomorrow’s models needs fundamentally different tools than the mechanic. Good design requires a deep collaboration between engineers, financial specialists and technology innovators. For telecom, unlike the operational tracking needs of the current dashboard, the design team needs tools that explicitly model the future— a complex system that does not yet exist—to create a shared understanding that unifies past data with judgment, guesses and analytic prediction . Such system modeling needs to go well beyond data analysis. Telecom ecosystems display complex behavior in time, and so to understand them effectively we must run simulations so that evolving dynamics become clear, and to ensure both short- and long-term margin goals, along with other targets. Given the density of information that needs to be combined to display the behavior of such systems, it is natural to use 3D, interactive representations for understanding the impact of today’s decisions on the future. Behind the scenes, a sophisticated data collection and aggregation infrastructure is required. Realizing this vision will require close collaboration between service providers and vendors within several functional areas including data management, packet inspection, customer experience management, revenue management, data visualization, decision visualization, analytics, and others. Ultimately, competitive differentiation will occur for those companies that can effectively manage the complex interactions between these diverse arenas, achieving what we might call a “decision advantage” as they navigate a complex world. 
Figure 1: An interactive, 3D display shows key elements of a system—here a multi-platform mobile ecosystem—so that an operator can plan for, and track, the impact of various decisions on multiple business model metrics. Dr. Pratt is co-founder of decision visualization software company Quantellia. Back to top
LTE and the Perfect Storm  By Dominic Smith, Cerillion Technologies
It’s sometimes hard to believe that 3G is now nearly 10 years old. Back in 2000, the now infamous 3G license auction in the UK set off a frenzy of activities that have changed the telecommunications market forever. 3G was used as the catalyst to introduce us to the concept of the “mobile Internet,” and it was often quipped that 3G stood for Games, Gambling and Girls in reference to the likely new revenue streams it would deliver. Data rates have improved considerably since the original 3GPP Release 99 specifications that formed the basis for the first 3G (UMTS) networks. The progression through to the latest HSPA+ networks has taken downlink speeds from a theoretical 2Mbits/sec to rates as high as 21Mbits/sec so far. Long Term Evolution (LTE)
Based on 3GPP Release 8, Long Term Evolution (LTE) is officially a “Pre-4G” technology and is expected to deliver data rates of 100Mbits/sec. The real 4G (as specified by the ITU) won’t arrive until 3GPP Release 10, known as LTE-Advanced, but LTE is widely bandied about as being the first 4G network technology. Over the past year, there have been a number of LTE trials announced by operators including the likes of China Mobile, Telefonica, Verizon and Vodafone to name but a few. And with these big names committed to LTE, it’s fair to say that the bandwagon is now rolling. Content Value Chain
Though LTE’s data rates promise to be a huge leap forward from the early days of 3G, the industry is still talking about the same explosion of data, content and video-based services that were being predicted 10 years ago. So is there going to be any real difference with LTE? During the heady days of the 3G auctions, the best brains of the billing world were gathering in the Global Billing Association (subsequently merged into TM Forum in 2007) to discuss and agree on the next generation billing and settlement models required for 3G. This covered the whole content value chain from content creator/owner through aggregators, distributors and sponsors, as well as the operators themselves hoping to do the billing and settlements. Looking back at the output of these discussions, it is clear that these models still hold true today. The content value chain has become the digital media value chain, but the same principles still apply. So does this mean that operators’ billing systems are already prepared for LTE? The Perfect Storm
Though most billing systems have been enabled to support a content value chain for several years, the slow take-up of 3G services has meant that these systems have rarely been put to full use. As we approach LTE, a number of different factors are coming together which puts us on the brink of the long-awaited boom in data and content services: - Devices. Looking back at the early concepts for 3G handsets and the obsession with video-calling, it’s easy to see why there was a slow take-up of content services. The current generation of touch-screen app store enabled smartphones provides slick user interfaces and have genuinely become lifestyle devices that are an integrated part of people’s lives.
- Content Creation. In the Web 2.0 era of Facebook, YouTube and Twitter, every phone user can also be a content creator.
- Application Development. The success of the iPhone generation of devices has created a whole ecosystem of software developers who are churning out applications independently from the operators themselves.
- Network Bandwidth. Application developers are able to design applications that utilize an ever-increasing bandwidth.
It can be argued that the current combination of devices, content creation and application development are already there. However, the arrival of LTE will set a new benchmark for what can be delivered over a mobile network, and with LTE chipsets being embedded into a wide array of consumer electronics, we will also see an explosion in the number of connected devices and widespread machine-to-machine applications. As LTE deployments commence, we are about to enter the “perfect storm,” and the exponential growth in data and content services will pose a huge threat to operators’ back office systems if they are not suitably prepared and stress tested for the processing power that will be required. Charging Standards
Ten years ago the only charging standards that existed were for managing roaming. Now, though IMS is much-maligned, it is also an integral part of the 3GPP specifications and a mandatory component of LTE. With IMS comes a very clear definition of online and offline charging models and standardized interfaces using Diameter. This is a huge leap forward for the industry and requires operators to upgrade their charging systems to take advantage of the new services that are coming and to ensure they are not cut out of the digital media value chain. With powerhouses such as Google looking to dominate the whole World Wide Web, operators will no doubt continue to face the battle as to who owns the customer. By embracing new convergent charging and policy management systems, operators can take control of the services and applications being delivered over their networks. However, in addition to protecting their current position, they can also create new opportunities to grow their revenue streams by offering billing as a service to other members of the value chain and beyond their traditional market boundaries. This is a brave new world for those operators prepared to open up their charging systems to outside parties. Nevertheless, with the perfect storm approaching, those who can make the first move into this market will have the opportunity to reap significant rewards. Dominic Smith is the Marketing Director at Cerillion Technologies. Back to top
Dynamic Billing Defined  By Henk Ensing, TNO ICT and Team Leader, TM Forum’s Revenue Management Group
Dynamic Billing is a next-generation revenue management concept being developed at TNO in the Netherlands that answers the question about how content and media services can be settled in a dynamic and efficient manner. Specifically, this article looks into the use of Dynamic Billing for gaming, an industry that is continuing to grow worldwide. Last year in the UK more money was spent on video games than on films – including both trips to the cinema and DVDs!
The essence of dynamic billing can be captured when looking at a market where merchants are able to offer their customers an individual and unique offer based on context variables such as time of day, quantity of stock, weather, customer profile and even “soft” arguments such as mood, etc. Each market merchant consciously and unconsciously makes use of rules in order to decide what final price (or service level agreement - SLA) will be offered to the customer. This dynamic, fully automated process is exactly what is possible by using Dynamic Billing. This creates three areas of improved efficiency in revenue management. First, more efficiency should directly translate into shorter time-to-market of new products and services, especially when these are created by cooperation between several parties (i.e. sub-contractors or service providers). Second, the standard billing processes such as mediation, pricing, billing, bill presentment and collections can be drastically shortened when we execute the essential parts of these processes at run-time, during a transaction (this is in contrast to the batch-oriented billing processes we still come across today). Last, this combination of short time-to-market and billing-per-transaction makes it possible for the first time to offer customers a personalized (individual and unique) offer. This offer is not only about pricing, but also includes all relevant SLAs in a fully automated manner. In reality, combining these three elements with current implementations of billing systems alone is not always feasible. The current processes and systems are just not arranged to support short-term product introductions, let alone the automated creation of individual customer offers. Playing Games
The gaming world has its heroes, notably influential developers like John Carmack (creator of Doom and Quake) and Dave Kaemmer (known for race simulators like GPL and NASCAR Racing). In 2008, Kaemmer introduced the world to iRacing, which became a hit in both the virtual and real-life racing community. iRacing used an innovative solution for distributing the application client purely via online channels. After a customer acquires access to the simulator through the iRacing website, the same browser window is used to start the training and race sessions that a customer wants to participate in. The pricing plan (payment is currently credit card only) contains a number of elements. The fixed amount per month provides the customer with a (limited) number of circuits and racing cars. A customer can get more involved by entering racing leagues, which necessitates acquiring additional circuits and cars. The monthly fee for iRacing is currently around US$20 with add-on amounts of US$15 or US$30. On the one hand, this pricing scheme offers the gamer a certain amount of clarity regarding his or her anticipated spend, but for an average player this business model is an expensive and inflexible proposition. Over time, this translates to a noticeable drop in active (paying) members in comparison to the first couple of months after introduction. In short, this relatively simple business model contributes to churn of interested users who may have stayed on board if other pricing options were available. However, by introducing Dynamic Billing the revenue from this group of end users could be retained. This demographic of a high number of low spenders is commonly known as the “long tail.” Using the earlier-mentioned “context variables” the merchant can utilize a Dynamic Billing model to provide a unique pricing model to an individual based on the characteristics of their usage patterns, etc. In the example of iRacing, the game itself contains a wealth of elements that are ideally suited to do billing, for example the number of laps driven, the number of races a player participates in, specific skill levels or time zones at which race participation is allowed. The business approach as described in the gaming scenario explains the fundamental difference between the traditional pricing and product model and puts game elements to good use as the context variables for pricing. The latter business model is able to fulfill the needs of each separate customer in a dynamic and recognizable fashion. It relies on multiple systems working together to determine the best offer to a particular individual, something currently uncommon for communications service providers. The move to all-IP networks and the introduction of customer profiling systems is critical for the success of Dynamic Billing, which appears to be well suited to many applications and even cloud computing. Henk Ensing works in the area of Service Enablement & Management at TNO ICT in the Netherlands and is acting in the role of Team Leader for TM Forum’s Revenue Management Group. Back to top
Business Benchmarking Billing Performance Study Opens  The TM Forum Business Benchmarking Billing Performance Study is now open. The annual survey is invaluable for wireline, cable and wireless Service Providers. It offers insights into the time and cost necessary to execute and manage the billing process, as well as a view into the customer experience. Numerous metrics measure time and relative efficiency from start of bill preparation to bill dispatch. This year, the participant community has incorporated new metrics that focus on time to market, electronic billing and electronic payments.
The benchmarking study allows Service Providers to measure their organizations from Strategic, Tactical and Operational perspectives — and to compare their performance to peers and competitors. TM Forum Performance Benchmarking Studies allow Service Providers to establish meaningful transformation objectives, set near-term process improvement goals and prioritize investments to yield optimal improvements in business performance. Service Providers use the data to focus investment in areas that will differentiate themselves and improve their efficiency and customer satisfaction. Participating Service Provider TM Forum members receive secure individualized reports showing their performance on each metric and have access to the broader results in the database. Suppliers who purchase a subscription to the Billing Performance Benchmarking Study receive an aggregated report as well as access to the results database. For a limited time, you can save 28 percent on the Revenue Management Gold benchmarking subscription, which includes Billing and Revenue Assurance Performance reports. To learn more, click here or contact Toni Graham if you would like to participate in Benchmarking studies Back to top
Revenue Management in the News Maroc Telecom to Migrate and Integrate its Billing and Customer Care Solution
Alcatel-Lucent announced today that Maroc Telecom, a global fixed, mobile and Internet communications operator in Morocco, has chosen Alcatel-Lucent as its billing and customer care system integrator to evolve its mobile billing platforms towards a new fully converged and integrated version. In a very competitive market, Maroc Telecom’s decision to migrate to a next-generation billing and customer care system for both fixed, mobile and Internet services reinforces its position as an innovative operator that strives to continually develop new business opportunities and to optimize its network.
Amdocs and IBM Team up on Real-time Charging Test
Amdocs teamed up with IBM recently to prove that real-time charging for prepaid transactions can be just as robust as traditional billing systems and less expensive as well. The company also partnered with Analysys Mason to examine the practices of network planning. IBM put Amdocs’ Convergent Charging platform through the paces on its BladeCenter servers and hit a new high-water performance mark of 230,000 transactions per second for real-time charging of complex prepaid events. Amdocs said that both its new Turbo Charging technology, which uses a single technology to process and charge for any type of event, and its In-Memory Object Store, which provides the caching that reduces the requests on the database and file systems, are responsible for the performance leap.
Redknee Sells InBill to Asia-Pacific Operator
Software and solutions provider Redknee has announced that a leading Asia Pacific-based multi-service operator will install Redknee’s InBill solution to manage its interconnect billing functions. InBill 6.0 will enable it to maximize the value of its fixed line network by effectively and efficiently managing multi-party wholesale billing settlements, helping to avoid issues related to revenue leakage, according to Redknee. The service provider requires a flexible and highly scalable interconnect billing solution that addresses the changing needs around its growing list of voice, data and broadband offerings, and can support the operator’s innovative services, such as e-government solutions, prepaid fixed line voice and broadband and voice over IP with number portability. Redknee says InBill 6.0 delivers details on network traffic and settlement issues and can handle the most complex interconnect agreements, providing more accurate wholesale billing and better dispute resolution. Back to top |